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Archive for January, 2013

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Japan Tobacco increases volume sales at home and internationally

| January 31, 2013

Japan Tobacco Inc’s domestic cigarette sales during the nine months to the end of December, at 89.4 billion, were increased by 10.5 per cent on those of the nine months to the end of December 2011.

The 2011 figure was negatively impacted by the manufacturing and distribution challenges JT faced following the earthquake and tsunami in March of that year.

JT’s market share was up from 54.9 per cent during April-December 2011 to 59.6 per cent during April-December 2012, and reached 60.1 per cent in December 2012.

Core revenue for the domestic tobacco business increased by 10.2 per cent to ¥502.8 billion and adjusted EBITDA was up by 13.3 per cent to ¥226.9 billion.

JT’s consolidated results included first nine-month figures for Japan Tobacco International, which saw its shipments during the period January 1, 2012 to September 30, 2012, at 327.9 billion, increased by 2.6 per cent on those of the equivalent period of 2011.

Excluding the effects of acquisitions (Haggar Cigarette & Tobacco Factory Ltd and GrysonNV), shipments grew by 1.2 per cent to 323.4 billion.

Global flagship brand shipments increased by 5.1 per cent to 202.5 billion.

JTI’s core revenue increased by 3.0 per cent to ¥702.9 billion and its adjusted EBITDA was up by 4.2 per cent to ¥266.0 billion.

JT’s total (including also its pharmaceutical, beverage and food businesses) consolidated revenue grew by 4.0 per cent to ¥1,608.4 billion and its adjusted EBITDA increased by 8.5 per cent to ¥494.5 billion. Operating profit was up by 13.2 per cent to ¥411.7 billion.

“Our tobacco businesses performed strongly,” said Mitsuomi Koizumi, president and CEO. “Internationally, we have continued to deliver a robust performance amid a challenging environment, demonstrating the soundness of our strategic focus on top line growth and broadening the earnings base. In Japan, our market share has recovered steadily, driven by efforts to strengthen brand equity.

“The transition to Mevius from Mild Seven has started smoothly. This is a pivotal step to realizing our growth strategy with the long-term aim of Mevius becoming the number one global premium brand.

“Looking ahead, we will continue to pursue quality top line growth by prioritizing business investment for sustainable medium to long-term profit growth.”

Meanwhile, JTI reported separately that its cigarette shipments during the year to the end of December, at 436.5 billion, were 2.5 per cent up on those of January-December 2011.

At the same time, global flagship brand shipments were increased by 4.8 per cent to 268.8 billion.

Core revenue was up by 5.4 per cent to US$11,817 million and core revenue per 1,000 cigarettes was increased by 2.7 per cent to US$27.3. Adjusted EBITDA grew by 9.1 per cent to US$4,302 million.

Indian growers want representation at next Conference of the Parties

| January 31, 2013

Tobacco growers from the states of Andhra Pradesh and Karnataka are asking the Indian government to ensure that they are represented in the group currently being formed to attend the next working session of the World Health Organization’s Framework Convention on Tobacco Control, according to a story in the latest issue of the BBM Bommidala Group newsletter.

In a letter to Prime Minister, Manmohan Singh, and the ministers of agriculture, commerce, health and family welfare, and external affairs, the growers said their presence at the meeting of the sixth Conference of the Parties (CoP6) was vital, especially in respect of discussions on reducing tobacco crop sizes.

CoP6 is due to be held in Moscow, Russia, in 2014.

The growers say that they need to be heard because they are the key stakeholders.

They are concerned that five large tobacco-producing countries, including Argentina, the US and Zimbabwe, are not parties to the convention and so stand to gain if tobacco production is curtailed in countries such as India.

Proposed public places smoking ban includes Melbourne city footpaths

| January 31, 2013

A new councilor, Richard Foster, is pushing for a ban on smoking in public places ‘throughout the city of Melbourne’, Australia, according to a story by Vittorio Hernandez for the IBTimes and quoting The Age. The ban would include footpaths.

Foster said that cutting the impact of smoking would help make Melbourne healthier.

“We have extended [no-smoking] boundaries around play areas, we have extended boundaries around childcare centres and hospitals, it is about time that we actually made it simpler for smokers and healthier for everybody else . . . just ban it outright and be done with it,” he said.

The councilor said he expected some legal challenge to the expanded smoking ban and some resistance, but he believes the move would have very strong support from the council and the public.

Going for a song

| January 31, 2013

A Canadian tobacco manufacturer established by ethnic Koreans plans to launch a cigarette named Gangnam, following Psy’s global hit, ‘Gangnam Style’, according to a story in The Korea Times.

Gangnam is the area south of the Han River that is now an affluent district of Seoul.
Canada Tobacco & Global (CT&G), set up by 38 Korean Canadians in Ontario last year, said on Wednesday that it would launch three new brands on February 15 – Gangnam, C38 and Midas.
“We had initially planned to name one of our new products ‘daebak’, a Korean word for jackpot,” CT&G CEO, Kang Chul-joong, was quoted as telling Yonhap News.

“But in order to capitalize on the global popularity of Gangnam Style we decided to name the cigarette after the song,” he added.

“We really hope our Gangnam cigarettes will be as successful as Psy’s song and let more foreigners know about Korea.’’
The company will first market the cigarette in Ontario, but next year it will go on sale in British   Columbia and other provinces.

The plan is then to ship the cigarette to China, Southeast Asia and South America, where Gangnam Style is said to be immensely popular.

The 38 Korean Canadians behind the venture run convenience stores in Ontario. They decided to establish a tobacco company in protest at the sales policies of British American Tobacco’s Imperial Tobacco Canada, which, they said, marginalized small vendors.

“We had initially tried to establish Korean Tobacco Import & Wholesale to import products from KT&G and sell them in Canada,” said Kang. “But we had difficulties in bringing Korean cigarettes into the country. So, we decided to set up CT&G.”

Upwardly mobile Imperial employees to shun lifts and use the stairs

| January 31, 2013

Imperial Tobacco employees are due to test their fitness levels in a contest to encourage improved health and well being.

Around 16 teams from the company’s operations in Australia, France, Poland, Spain and the UK have signed up for the 2013 Global Corporate Challenge.

‘Evidence shows that, as well as helping to keep fit, exercise reduces stress and improves productivity,’ Imperial said in a note posted on its website.

During the six month challenge, which starts in May, each participant will carry a pedometer to measure their daily exercise rates.

The results should be impressive. When almost 50 people from Imperial’s Nottingham, UK, site took part in a similar event last year they clocked up the equivalent of more than 87 million steps.

“This challenge proved such a success that we invited others to join in this time,” said David Barber, occupational health adviser in the UK.

“People are often surprised at how much exercise they get in a working day. The aim is to encourage them to do more, such as using the stairs instead of the lift.”

Imperial’s fine-cut sales up nine per cent in three months to end of December

| January 30, 2013

Imperial Tobacco’s fine-cut sales during the three months to the end of December, boosted by strong growth in make-your-own tobacco sales in Western and Central Europe, were nine per cent higher than those of the three months to the end of December 2011.

Nevertheless, Imperial’s total stick equivalent volumes (cigarettes and fine-cut) were down by one per cent, according to an interim management statement issued ahead of today’s annual general meeting.

The company’s key strategic cigarette brands, Davidoff, Gauloises, West and JPS were said to have performed well.

Premium cigar volumes grew by three per cent on the back of the success of Montecristo mini cigars, which were launched last year.

And Scandinavian snus sales increased by 33 per cent.

Imperial said that its EU performance was impacted by further declines in the size of the licit market and the rise of the illicit trade, in what remained a competitive and tough economic environment.

But in Australia, where all tobacco products have been sold in plain packaging since December 1, there had been no significant change in consumption trends and Imperial said it was continuing to develop strategic initiatives that would support the long-term growth of its portfolio.

Imperial said it was confident in its strategic focus and was continuing to increase investment behind its ‘key total tobacco assets and geographies’.

‘Given our ongoing investment and the European market pressures we expect first half adjusted operating profit to be down year on year,’ it added.

‘Our full year results remain in line with our expectations, reflecting the benefits from an acceleration of a cost optimization programme designed to fund our continued investments and offset the current European market pressures; we expect that around 55 per cent of adjusted operating profits will be delivered in the second half.’