German cigar supplier Arnold André GmbH & Co KG has announced “very pleasing” overall results for 2011 despite some turbulence during the year.
The distribution partner change of Swedish Match brands to Scandinavian Tobacco Germany initially brought a double-digit loss of revenue, the company said. This loss was quickly more than compensated for with the acquisition of the German distribution of the Oettinger Davidoff Group and Toscano brands.
Due to the end of the co-operation with Swedish Match, new distribution partners had to be found in many of the 80 export countries where Arnold André products are present. Despite these difficult conditions, total sales increased by 13.5% to €76 million, the firm reported.
Worldwide sales of in-house produced products increased in the past year by a further 8% to 420 million pieces. Despite “difficult” conditions, the family business located in Bünde, East Westphalia, “is still clearly on the road to success the fourth year in a row”, it said.
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Tropenschatz cigars in a rolling machine in the Arnold André factory in Königslutter, Germany |
Export: a growth factor
Overseas markets spurred growth, with exports accounting for almost 40% of total sales with an upswing of 17%. Ten years ago the share was 10%.
The established company’s strongest growth was gained in Italy, France, and Spain. There is also surprisingly high demand in Greece, the epicentre of the Euro crisis, it noted.
Development in the rest of Western Europe is also positive, it said, as well as in Eastern Central Europe and in Asia and Africa, where new markets could be developed.
According to Managing Director Wiljo von Maren, the change to different distribution partners led to better results in all cases.
“This was one of our most important success factors last year. In addition, we gained an excellent brand portfolio with the Oettinger Davidoff Group in October 2011,” he said.
Managing Director Rainer Göhner said domestic demand for cigars and cigarillos from the in-house production was stable compared to the previous year. The slight decline in total turnover was due to the loss of the Swedish Match brands.
The large format cigars, especially the shortfiller, continued to lose ground. This originally is connected to the smoking ban in restaurants, the company explained.
“Retail and customers have reacted very well to our top brands Clubmaster with mini cigarillos and Handelsgold Sweet Cigarillos with their convincing price-performance ratio,” it said.
A result of the restructuring is the considerable increase in the number of employees. Overall, 493 employees were employed by the company worldwide at the end of 2011. Some 390 were employed at the two locations Bünde and Königslutter. Rainer Göhner said the number of employees would grow “considerably” in 2012.
Arnold André Dominicana SRL
In addition, the wrapping company Arnold André Dominicana SRL, founded in May 2011, has considerably contributed to this increase.
Up to now, the essential wrappers for cigars and cigarillos for the André company were ordered in Indonesia on commission. With the new company owned by André, a further step is taken towards independence from suppliers.
Since January 2012 André has steadily relocated the production of the wrapper bobbins in the Dominican Republic. Full capacity should be reached by the end of 2012 with 300 employees, the firm forecast.
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