Another tobacco company will use the Piedmont Big Sale Warehouse on Riverside Drive as part of its business expansion plans.
United Tobacco Company of Wilson, N.C., will use the 142,000-square-foot warehouse as a receiving station this year and will start contracting with growers next week, said CEO Steve Coyte.
“We think Danville’s a great location for a station,” Coyte said. “It’s very accessible to the growers in North Carolina and Virginia.”
Philip Morris USA had been receiving tobacco at Piedmont Big Sale for the past 11 years until the cigarette manufacturer moved its station to Yanceyville, N.C., at the end of last year. United Tobacco, a full-service leaf dealer, saw an opportunity and seized it, Coyte said.
The company plans to contract for about 6 million pounds of Old Belt tobacco this year, and would increase the amount in the future as business grows. Pricing will be competitive.
More than 160 growers have contacted warehouse agent Harry Lea to inquire about the operation.
The privately owned company has been operating mainly in eastern North Carolina for the past 14 years. Back when it was founded, it was the first company to directly contract with growers.
Owners of United Tobacco include tobacco growers who also sell tobacco to the company, and so the company realizes the importance of relationships with growers, Coyte said.
“It’s our intention to be in Danville for a long time and to expand the business in that area,” he added.
As the majority of purchased tobacco is for exports, United Tobacco offers growers another market opportunity, Coyte said. The company receives orders from cigarette manufacturers around the world.
Lea said it was a logical step for United Tobacco to come to Danville, and that having Old Belt tobacco could also help the company spread the risk of severe weather, as Hurricane Irene damaged eastern North Carolina crops last year.
“Overall, I just hated to see the Philip Morris station leave,” Lea said. “ … It was a big loss to lose it, but it’s also a healthy step in the right direction to have somebody else come in and replace it.”
“I know it will work,” said Coyte, who has 35 years experience in the industry. “I’m excited about the opportunity we have.”
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