SCANDINAVIAN TOB ACCO GROUP
DIGITAL REPORT 2020
THE SCIENCE OF PROCUREMENT AT SCANDINAVIAN TOBACCO GROUP
IN ASSOCIATION WITH
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THE SCIENCE OF PROCUREMENT AT SCANDINAVIAN TOBACCO GROUP WRITTEN BY
SEAN GALEA-PACE
PRODUCED BY
CHARLOTTE CLARKE
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S C A N D I N AV I A N T O B A C C O G R O U P
HOW SCANDINAVIAN TOBACCO GROUP’S CULTURAL TRANSFORMATION HAS REIMAGINED AND OPTIMISED THE PROCUREMENT PROCESS
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eadquartered in Copenhagen, Denmark, Scandinavian Tobacco Group (STG) has enjoyed a smooth and consistent level of
success over the years. Originally founded in 1961 as Skandinavisk Tobakskompagni A/S, the company initially housed a full-spectrum of tobacco products, but eventually settled on retaining its cigar, pipe and rolling tobacco businesses after restructuring itself in 2008. Now an internationally recognised company with 6,900 employees and known for producing high-quality, world-renowned products popular in both the US and Europe, STG has pursued a course aimed at maintaining shareholder value by becoming an indisputable leader in the tobacco industry.
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OUR BUSINESS IS HOW WE DO BUSINESS Quality Importers Trading Co., Inc. is a B2B product innovator and distributor for some of the industry’s most iconic international brands. QI also represents a global network of manufacturers specializing in the areas of wooden-ware, plastic injection molding, metal stamping and product packaging. .
OUR MISSION IS TO UNLOCK OUR CUSTOMER’S BUSINESS POTENTIAL BUILD ON A SOLID FOUNDATION During its twenty-plus years of business, while enjoying continuous annual growth, Quality Importers Trading Co., has developed an internal infrastructure and network of global partnerships that has ensured that its customers succeed in calm waters, and prosper even more in times of international economic and political storms, when most cannot. Keeping production and deliveries on schedule helps companies maintain healthy inventory levels that are positioned for growth. External threats to the supply chain caused by economic uncertainty, tariffs and other influences can only be mitigated with sound organization, time-proven processes and experience. Keeping product flowing from the supply chain onto the distribution channels has proven to be the difference between success and failure, often with no third option. KEYS TO WEATHERING THE STORM THROUGH STRATEGIC NETWORKS • Closely monitor product production and deliveries to ensure adhesion to schedules • Tight control and visibility on costs • Minimize external threats by managing economic uncertainty and tariffs • Build inventory levels that are positioned for growth while preserving cash flow • Execute with a strong sense of urgency and accuracy.
design distribution
sourcing
PRODUCT LAUNCH
sampling
packaging branding
QI’s balanced and symbiotic integration: from concept to creation.
INVEST IN TIMES OF UNCERTAINTY Making sound business decisions a habit and part of the culture place the company in a position to invest when and where many others may steer away. This strategy has paid off and Quality Importers has taken the initiative to further improve its products and services with a large investment in cloudbased systems with ERP and other resource management tools that will help the company unleash even more of its customers’ potential. Let’s get started on your future. Contact us now at sales@qualityimporters.com.
1 (954) 602-5637 // www.qualityimporters.com // Instragram: @QualityImporters // Facebook: www.facebook/QITradingCo Twitter: @QITradingCo
S C A N D I N AV I A N T O B A C C O G R O U P
STG has an innovative and consumer-
“ IN ORDER FOR STG TO ACHIEVE ITS GOALS, A STRONG COLLABORATION WITH STAKEHOLDERS AND VENDORS TO ENSURE THAT THEY SHARED A COMMON VISION, GOAL AND STRATEGY IS VITAL”
focused approach to its brand portfolio management that relies on a robust understanding of its consumers across markets and categories, as well as being committed to developing its brands, concepts and products for markets globally. The organisation’s strategy is focused on four main business priorities. Across categories and markets, these priorities help us create value from our recognised brands, extensive tobacco expertise, global scale, market footprint
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and supply chain. When rethinking
Scandinavian Tobacco Group: My Ignition: Iris CLICK TO WATCH
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09 procurement, the company defined six
STG shares a particularly strong rela-
main principles to ensure its ongoing
tionship with is Quality Importers (QI).
competitiveness: securing supply, main-
A Florida-based company specialising
taining business continuity, simplicity,
in cigar storage and packaging, QI pro-
improving margins, improving networks
vides first-class service to STG and is
and realising targets. By standardis-
considered one of STG’s most reliable
ing its processes in this way, STG was
and trusted partners.
able to increase the transparency of its
During the first quarter of 2020, STG
operations and better measure if it was
delivered net sales of DKK 1,791 mil-
adhering to its own goals.
lion, organic net sales growth of 5%.
In order for STG to achieve its goals,
The first quarter 2020 includes Agio
a strong collaboration with stakehold-
Cigars, which was acquired on January
ers and vendors to ensure that they
2, 2020. The quarter showcased posi-
share a common vision, goal and
tive organic growth in net sales across
strategy is vital. One such vendor that
all four commercial divisions with w w w.st- gro u p . com
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“ SCANDINAVIAN TOBACCO GROUP ENTERED THE COVID-19 CRISIS FROM A POSITION OF STRENGTH, AND WE WILL REMAIN IN GOOD FINANCIAL HEALTH EVEN THOUGH WE EXPECT A NEGATIVE IMPACT FROM THE COVID-19 CRISIS ON OUR BUSINESS IN 2020”
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S C A N D I N AV I A N T O B A C C O G R O U P
Scandinavian Tobacco Group: From Seed to Handmade Cigar: Harvesting CLICK TO WATCH
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0:52
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high growth in Region Machine-Made
“ DURING THE FIRST QUARTER OF 2020, STG DELIVERED NET SALES OF DKK 1,791 MILLION, ORGANIC NET SALES GROWTH OF 5%”
Cigars of 5.2% and in Region Smoking Tobacco & Accessories of 11.6%. In a press release on the company’s website, Niels Frederiksen, CEO of Scandinavian Tobacco Group, commented: “In the middle of a unprecedented global pandemic with a high degree of volatility and uncertainty in most markets, we are able to present a solid result for the first three months of 2020 with net sales growth and a strong cash flow as well as we
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have revealed the plans for creating
a negative impact from the COVID-19
significant value with the integration
crisis on our business in 2020. To ensure
of Agio Cigars. During these uniquely
the continued strength of our underlying
challenging times, I have been encour-
business we have reinforced our empha-
aged by the resilience of our business
sis on costs and strengthened our focus
and by the dedication of our employ-
on cash and liquidity.”
ees in keeping our business running
With the goal of being the undisputed
and delivering on our promise to our
leader in a declining market, STG has
consumers and customers.
put itself in a position to remain a major
“Scandinavian Tobacco Group entered
force in cigars and tobacco and grow
the COVID-19 crisis from a position of
organically or through mergers and
strength, and we will remain in good
acquisitions. Through its “Fueling the
financial health even though we expect
Growth” campaign, an emphasis was w w w.st- gro u p . com
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put on gathering quality data from which decisions could be made. Fueling the Growth makes STG more agile by removing layers of management and there is now a maximum of seven between CEO and shop floor, when previously there could be up to 12. This will allow for messages across the organisation to be sped up and experts in the sector now take decisions and bring them to market much more efficiently. With over 200 brands in the company’s portfolio, most recently Royal Agio Cigars, a leading European cigar manufacturer, STG is in the enviable position of being able to retain its valued customers whilst also attracting new ones with its superior products. Of paramount importance to this vision is a rock-solid procurement process which seeks to engage stakeholders and partners and utilise the latest technology.
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SCANDINAVIAN TOBACCO GROUP www.st-group.com
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