STORY | Sri Lanka developed as a hub for premium cigar tobacco manufacturing
Mr Serge Ponnet, Legal and Business Affairs, J. Cortès Cigars
In our newest article, Mr Serge Ponnet from J. Cortès Cigars tells the GSP Hub team the success story of their company, closely tied to the GSP.
Belgian cigar manufacturer J. Cortès Cigars, with a history of almost 100 years, started their activities in Sri Lanka on a very small scale about 20 years ago with only 100 people working in a small plant, discovering the complexity of tobacco leaves processing.
“The story starts ages ago around the city of Medan on the island of Sumatra in Indonesia.” – begins Mr Ponnet. The island is blessed with a unique terroir combined with a highly skilled workforce, resulting in one of the most precious tobaccos in the world. Mass production does not exist on the island, small batches of top-quality premium leaves are cultivated and fermented by specialists to reach the highest gustative standards. Indonesia’s participation in the GSP scheme strongly facilitates export from Sumatra to the EU, making the island ideal for the cultivation and export of high-quality tobacco.
“But before top quality tobacco leaves can be transformed into a premium cigar even more specialist work has to be done.” – continues Mr Ponnet. Fermentation, grade selection, colour selection - every individual tobacco leaf goes through more than 15 hands before it is turned into a premium cigar. This work is done in Sri Lanka.
Sri Lanka benefits from the EU’s GSP+ scheme and exported EUR 3.43 million worth of cigars (including outward processing) utilising zero duty concessions to the EU in 2019 under the GSP+. During the last 20 years, premium tobacco processing remained stable and economic activities stayed strong even under economic and social fluctuations. A small factory was extended and renovated, new plants were built and what started as a company with 100 employees became a state-of-the-art plant with more than 2.500 highly skilled employees.
“Factories were built, jobs were created, and know-how was shared. The EU GSP programme greatly fostered economic development in Sri Lanka, Indonesia, and the EU. After the launch of the GSP scheme by the EU, the governments of Sri Lanka and Indonesia further negotiated a cross-regional cumulation agreement which gives additional benefit to the utilisation of the GSP.” – concludes Mr Ponnet.
Mr Ponnet is looking forward to continuing his business activities in Indonesia and Sri Lanka, and is positive that the GSP scheme will further facilitate exports from beneficiary countries to the EU in the future, opening up new business opportunities for EU importers and beneficiary producers alike.
Continue your discussion with us:
- Apart from duty reductions, how can the GSP further encourage European investors to invest in beneficiary countries and contribute to their economic development?
- How can the GSP contribute to the development of long global supply chains (Indonesia to Sri Lanka to the EU?)
Click on the link to be redirected to Indonesia's or Sri Lanka's country page and use the conversations tool to start a discussion!
Are you interested in connecting with other business stakeholders? Leave a post in our business engagement forum!