THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, September 1, 1996 TAG: 9608310665
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: 98 lines
The colony of Virginia and the port of Norfolk built themselves in large part on the export of tobacco to a Europe crazed for smoke.
But even then tobacco wasn't politically popular. Not needing scientific studies, the English King James I called tobacco ``dangerous to the lungs.''
Despite aggressive political efforts to curb smoking now, especially among youth in the United States, tobacco remains a viable part of the region's and state's economy.
Tobacco is still one of the biggest and most valuable general cargo shipped through the port of Hampton Roads. Tobacco exports and imports have helped make Hampton Roads the second-largest general cargo port on the East Coast after New York.
``Tobacco has always been a base commodity for this port,'' said Robert Bray, executive director for the Virginia Port Authority.
President Clinton's proposed crackdown on the marketing and sale of cigarettes isn't likely to hurt Hampton Roads as much as it might other regions of Virginia where tobacco is grown, processed and made into cigarettes.
Two weeks ago, Clinton declared nicotine an addictive drug, clearing the way for a raft of regulations on tobacco sales and advertising. Nicotine is a substance in tobacco.
Although hundreds of thousands of tons of tobacco and tobacco products move through the region's port each year, very little of the leaf is grown in Hampton Roads. A few farms covering little more than 67 acres in Suffolk harvested about 133,000 pounds of tobacco last year, according to the the Virginia Department of Agricultural and Consumer Services. That's very little compared to the 72.7 million pounds grown statewide.
Tobacco is Virginia's top cash crop, producing $174.9 million for farmers last year. It's also the state's leading export as about $3.5 billion worth is shipped abroad each year.
Along the docks, more than a 110,102 tons of cigarettes and other processed tobacco products were shipped to eager overseas markets in 1994. Another 94,370 tons of unmanufactured tobacco was shipped to cigarette plants overseas.
Manufactured tobacco was No. 4 among the port's largest general cargo exports and unmanufactured tobacco was No. 8.
The $1.9 billion value of tobacco exports in 1994 make it the most valuable general cargo exported through Hampton Roads by nearly three times. Next is civil-engineering equipment worth nearly $679 million.
``We're still the largest tobacco exporting port in the nation,'' Bray said.
Philip Morris Co. is a big reason for that. The cigarette maker is the port's No. 2 exporter and two other tobacco firms are in the top 20.
The Philip Morris plant in Richmond produces 600 million cigarettes a day. Some of those are packed into shipping containers, trucked down to the port and loaded aboard ships.
Offshore tobacco markets have always been important to Philip Morris, maker of Marlboro and other well known brands, spokeswoman Elizabeth Cho said.
Still, Cho said Philip Morris International is ``thriving'' as more and more markets that were once closed to U.S. imports are opened.
``There are people in a lot of other countries who smoke who haven't had a chance to use our products,'' Cho said.
Philip Morris' international sales grew in 1995 even as its domestic sales slipped a little. More than $30 billion of the New York-based conglomerate's 1995 sales of $53 billion came from tobacco. Philip Morris also owns Kraft Foods and Miller Brewing.
Just as in colonial times, Europe is still the biggest overseas market for U.S. tobacco products.
``The market historically developed into Europe,'' said Bob Armbruster, general manager of Norton Lilly International, a shipping agency that represents several lines that transport tobacco.
But other markets have been growing for tobacco exports too, Asia in particular, Armbruster said.
``Asia has continued to increase its consumption, and we've seen strong growth there,'' he said.
The once-growing Middle East market is slumping because of the low price of oil, he said.
While domestic tobacco regulation may not affect the Hampton Roads port in the near-term, the longer term prospects are unclear.
``As the U.S., through regulations and such, continues to ratchet down on tobacco consumption, I fear we're going to see the tobacco companies move their manufacturing offshore,'' Bray said.
Overseas plants will likely use locally grown tobacco.
``There are some countries, Brazil for example, that produce a doggone good tobacco leaf,'' Bray said.
Indeed, a lot of tobacco grown in South America and Turkey and Greece is shipped through Hampton Roads and Richmond to the Philip Morris plant.
In 1994, 151,171 tons of tobacco was imported through the port, mostly through Newport News Marine Terminal. The small port of Richmond unloaded 41,582 tons of baled tobacco destined for the plant and its warehouses, which are about a mile a way.
Ships of the Pan American Independent Line, represented by Norton Lilly, call at the Newport News terminal once a week with tobacco from Brazil and Argentina, Armbruster said.
Tobacco is principally shipped in containers. One standard 40-foot container can hold about 20 tons of tobacco.
``We (Pan American) have discharged anywhere from 20 to 100 containers of tobacco from a ship,'' Armbruster said. ``It's 20 to 40 percent of our imports at any given time.'' MEMO: Staff writer Wendy Grossman contributed to this report. by CNB