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Alliance One and China Tobacco Announce the Creation of a New Joint Venture in Brazil

press release

Jan. 9, 2012, 9:07 a.m. EST

Alliance One and China Tobacco Announce the Creation of a New Joint Venture in Brazil
MORRISVILLE, N.C., Jan. 9, 2012 /PRNewswire via COMTEX/ — Alliance One International, Inc. /quotes/zigman/372210/quotes/nls/aoi AOI +2.38% today announced that its Brazilian subsidiary Alliance One Brasil Exportadora de Tabacos (“AOB”) and China Tabaco Internacional do Brasil (“CTIB”) have signed a definitive agreement to form a new joint venture company in Brazil.

Under the agreement, AOB will transfer to the joint venture production contracts with approximately six thousand integrated farmers for the upcoming 2011/2012 crop. The joint venture’s administrative and buying functions will operate in a portion of Alliance One’s recently expanded facilities in Venancio Aires and tobacco processing will occur in AOB’s facility. The joint venture will be owned 51% by CTIB and 49% by AOB.

Mr. Liang Deqing, president of CTIB, commented: “The high quality of the Brazilian tobacco combined with Brazil’s capacity to grow volumes, has meant that Brazilian Tobacco is a highly desirable component in the better quality Chinese cigarettes. For a long time we have been studying the Brazilian market with the intention to start buying directly from the tobacco farmers. The joint venture is the union of two powerhouses of the tobacco industry, a strategic alliance that strengthens all of the parties in the Brazilian tobacco market, one of the most important in the world.”

Alexandre Strohschoen, Alliance One Regional Director South America, stated: “The main objective of the joint venture is to promote the production of quality tobacco to supply the Chinese market. China’s cigarette market is the biggest and fastest growing market in the world and this agreement reinforces Brazil as one of the main suppliers of this market. It is a partnership aligned to Alliance One’s strategy of growth and sustainability.”

Pieter Sikkel, Alliance One’s President, remarked: “China Tobacco is a highly valued partner and we are pleased that our collaborative relationship has again expanded, to now include the new joint venture in Brazil. Consistent with our strategic focus, this arrangement helps a key customer achieve one of their stated goals, while providing AOI incremental growth opportunities and further alignment with the largest and fastest growing market in the world.”

Alliance One International is a leading independent leaf tobacco merchant serving the world’s large multinational cigarette manufacturers. For more information on Alliance One, visit the Company’s website at .

SOURCE Alliance One International, Inc.

Copyright (C) 2012 PR Newswire. All rights reserved

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