Image courtesy of Nicos Gleoudis Kavex S.A.
Kavex: Supplying the World from Thessaloniki
Panoramic view of a processing hall at Kavex
Having managed to survive the economic upheaval that gripped Greece in recent years and saw the demise of many local tobacco merchants, Nicos Gleoudis Kavex S.A. has emerged as a stronger entity, selling its products on four continents, carefully balancing its customer spread.
By Thomas Schmid
Thessaloniki-based Nicos Gleoudis Kavex S.A. (Kavex) was established in 1927 and today is one of the largest independent tobacco trading companies in Greece, currently shipping its merchandise to 32 countries across four continents.
Image courtesy of Nicos Gleoudis Kavex S.A.
Kavex: Supplying the World from Thessaloniki
Dorothea Gleoudis, general manager, Nicos Gleoudis Kavex S.A.
Dorothea Gleoudis, the general manager of the family-owned business, said she didn’t curate particular countries or regions as her company’s key markets. “To us it’s important to keep a good balance among the various markets,” said Gleoudis. Approximately 35% of Kavex’ annual sales go to Asia, primarily to customers in Indonesia, the Philippines, and Taiwan, and Gleoudis expected this ratio to increase slightly over the next few years, attesting to the fact that the region is slowly but once again gaining in relevance after the economic upheaval of recent times. But while the company was largely content with the market spread currently represented in its global customer portfolio, Gleoudis said she felt her business was still under-represented in the United States and that she would like to raise her presence there.
Kavex sources its tobaccos exclusively through contract farming, as auctions in Greece have become obsolete decades ago. “Since the entrance of Greece into the European Union in the year 1981, all tobacco crops in Greece are grown under direct contract arrangements between farmers and traders, whereas contracts are signed during springtime each year,” Gleoudis explained the procedure. She added that almost all of the tobaccos purchased is exported (cf. table).
Image courtesy of Nicos Gleoudis Kavex S.A.
Kavex: Supplying the World from Thessaloniki
Farmer preparing sun-dried Basma leaves for fermentation.
Farmer Incentives and Socio-Economic Responsibility
To ensure consistent quality and sufficient output to keep the business wheels turning, Kavex relies in extensive farmer training.
“We engage and deploy a large team of agronomists to fully educate farmers in all matters of quality and sustainability,” said Gleoudis. The company also offers buying price incentives to those farmers who can achieve better quality and higher top-grade percentages in their annual harvests. Continuous employee and farmer training, agrochemical and seed monitoring, as well as water and soil analyses are all practiced as a matter of course at Kavex, being the rule rather than the exception. The company is enthusiastically following a broad social responsibility program (SRP) and also sits on the board of directors of the Hellenic Society of Environment and Civilization, as well as the Northern Greece Entrepreneurs Cultural Society.
As such, the company has made it a priority to address various socio-economic factors affecting its contract growers and workers, fights against all forms of discrimination, helps improve farmers’ living standards and is instrumentally involved in the elimination of child labor, according to Dorothea Gleoudis.
Superior Oriental from Small Farms
According to Gleoudis, the main tobacco crops currently produced in Greece are the oriental varieties Basma and Katerini, but there also is a considerably large amount of FCV and a modest output of burley.
“Greek oriental tobaccos like Basma and Katerini are in particularly high demand in the international cigarette manufacturing industry due to their unique characteristics, as they are a valuable component of high-quality American Blended cigarettes,” said Gleoudis. “Meanwhile, Greek FCV and burley tobaccos are mainly used as fillers, helping to keep a good quality-to-price balance.” She added that with the exception of FCV tobaccos, which are grown on larger commercial estates, all other varieties come from smallholder farms. Normally cured at the source, i.e. the estate or farm (where Virginia is typically flue-cured and oriental varieties are sun-cured), Kavex takes care of secondary processing in its factories, selling its merchandise as strips (FCV) or – in the case of the orientals – in loose leaf form.