19 April 2005

Zambia: Dimon, Stancom Merge

Chipata — Dimon Zambia and Standard Tobacco Company (stancom) have merged.

The merger, which will see the establishment of a new company called Alliance One International, follows a decision by the two companies' boards last November to merge their operations in an effort to reduce costs and enhance efficiency.

But some tobacco growers fear that the merger will work against them by establishing a monopoly.

Dimon Zambia general manager Lameck Mangani confirmed the merger in an interview and said that the process would be finalised by the end of this month.

Mangani explained that farmers need not worry about a monopoly.

"What has happened is that instead of duplicating our efforts, we shall rationalise them so that by reducing costs, we can serve the farmers better," he said.

Mangani added that the new company would enhance extension services to the farmers since staff would be redeployed to areas where such staff were lacking.

But Kapara Tobacco Farmers Association chairman Seveliano Phiri contended that the merger would result in farmers being exploited.

Phiri said regardless of the reason for the merger, it would reduce competition in the sector and hence make the new company take advantage of farmers.

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