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JT’s domestic and international volumes down

| February 5, 2015

Japan Tobacco Inc reported today that its domestic cigarette sales volume during the year to the end of December, at 112.4 billion, was down by 3.6 percent on that of the year to the end of December 2013, 116.5 billion.

JT said that its volume had been affected by a decline in overall industry volumes, which fell by 3.4 percent.

Its market share in 2014 was 60.4 percent, down from 60.5 percent in 2013.

Core revenue for the domestic tobacco business fell by 1.0 per cent to ¥649.8 billion but adjusted operating profit was increased by 1.8 percent to ¥238.7 billion.

Meanwhile, Japan Tobacco International’s total tobacco (including cigarettes, fine-cut, cigars, pipe tobacco and snus, but excluding water-pipe tobacco, emerging products and contract manufactured goods) shipments during the year to the end of December, at 398.0 billion, were down by 4.7 percent on those of the year to the end of December 2013, 417.5 billion.

Global flagship brand shipments were down, too, from 267.5 billion to 262.2 billion.

JT reported that JTI’s total shipment volume decline had been driven primarily by industry volume contraction in Russia, which could not be offset by growth in the Benelux markets, the Caucasus, Germany, Hungary, the markets of the Middle East and Turkey.

Year-on-year market share had increased in the key markets of France, Spain, Turkey and the UK. And in Russia, the share of market accounted for by GFBs had continued to grow, driven by Winston, which had reached a record 15 percent.

Core revenue increased by 4.8 percent to ¥1,258.2billion, while adjusted operating profit rose by 8.8 percent to ¥447.1 billion.

In presenting the results, Mitsuomi Koizumi, president and CEO of JT, said the company’s international tobacco business had delivered another set of impressive financial results and continued to be the profit growth engine of the JT Group. “This strong performance was driven by a combination of pricing gains, continued growth in GFB share of market and share of value, and effective cost management,” he said. “We continue to prioritize quality top line growth and invest in our brands as well as our product portfolio and geographic footprint.

“Domestically, after the April consumption tax hike, we increased investment in brand equity with a particular focus on Mevius and higher unit price products, which resulted in an increase of our share of value.

“As we make the transition to a more agile sales operation, we will strengthen our ability to anticipate and respond to the consumers’ needs in what has become an increasingly competitive environment.

“I believe the determined pursuit of the ’4S’ model standards will give us the ability to overcome any challenges that may lie ahead. Our highly motivated employees will create additional value for our consumers, leading to the sustainable profit growth and a competitive return to shareholders. Guided by these principles, we will continue to prioritize business investments, while aiming to exceed the expectations of all our stakeholders.”

New tobacco law being fast-tracked in Thailand

| February 5, 2015

Thailand’s Public Health Minister Rajata Rajatanavin yesterday blamed the finance and agriculture ministries for delaying a new, stricter law aimed at controlling the consumption of tobacco and cigarettes, according to a story in The Nation.

Rajata said the two ministries had until next week to come up with their stance on the much-awaited bill or it would be forwarded to the cabinet for approval and implementation in four to six months.

He said the new law, which could be debated either when it was with the Council of State or being scrutinised by the National Legislative Assembly, would not affect Thai tobacco growers or violate international trade laws.

The Nation said the new law would forbid the sale of cigarettes to people under the age of 20, encourage smaller cigarette packs, ban advertising or marketing of tobacco via electronic or social media, and prohibit tobacco companies from participating in corporate social responsibility activities.

Altria to webcast conference presentation

| February 5, 2015

The Altria Group is due to host a webcast of its business presentation at the annual Consumer Analyst Group of New York conference in Boca Raton, Florida, starting about 09.15 Eastern Time on February 18.

The webcast, which will be in listen-only mode, will feature a presentation by Marty Barrington, chairman and CEO, and other members of Altria’s senior management team.

Pre-event registration is necessary and available at

An archived copy of the webcast will be available at the same site or through the Altria Investor App, which is free and available for download at or through the Apple App Store or Google Play.

Salvoy Acetow introduces Rhondia Micro Tow

| February 4, 2015

Solvay Acetow has introduced a new product—Rhondia Micro Tow.

Rhondia Micro Tow offers a top-quality and highly customized tow specification, and extends the range of low-denier tow items.

The new specification provides low pressure drop and guaranteed filtration efficiency while delivering a high standard of quality. Rhodia is also suitable for low diameter filters with capsules or additives.

Production declines point to more balanced market

| February 4, 2015

The current outlook for 2015 tobacco crops indicates decreased production volumes in the key growing areas, which is an important step towards more balanced markets, according to George C. Freeman, III, chairman, president, and CEO of Universal Corporation.

Freeman was speaking yesterday as he presented the company’s third-quarter results.

“The current fiscal year continues to develop as we expected, with shipments heavily weighted towards the second half of the year,” he said. “Third quarter lamina volumes shipped by our flue-cured and Burley operations were the highest that we’ve seen for several years. In addition, our third quarter operating earnings benefitted from lower selling, general, and administrative costs, as well as improved gross margins. Our prudent inventory management has kept uncommitted levels in the normal range, at 14 percent. The robust third quarter sales volumes and operating profit improvements offset a portion of the large declines we reported in the first half of the year from the later start to the markets and delayed receipt of shipping instructions from customers caused by the oversupply conditions this year.

“Although it is early and logistics delays can always occur, the fourth fiscal quarter’s processing and shipping schedules are proceeding as anticipated, with the largest portion of shipping volumes coming from the Africa origins. We continue to expect stronger fourth quarter sales volumes compared to the same quarter last year. The current outlook for the 2015 crops, which will impact our fiscal year 2016 results, indicates decreased production volumes in the key growing areas, which is an important step towards more balanced markets.”

Universal reported that net income for the third quarter of fiscal year 2015, which ended December 31, was $53.0 million, or $1.87 per diluted share, compared with net income for the previous year’s third fiscal quarter of $38.6 million, or $1.36 per diluted share.

Segment operating income for the third fiscal quarter of $93.5 million increased by 25 percent on that of the previous year, primarily due to improved results from higher gross margins and lower selling, general, and administrative costs.

Consolidated revenues decreased by about 1 percent to $758.1 million mainly attributable to lower prices and flat total volumes.

June deadline for Kenya’s graphic pack warnings

| February 4, 2015

Graphic health warnings are due to become a requirement on cigarette packs sold in Kenya from June, according to a story by Margaret Wahito for Capital FM Kenya.

The full-color graphics are to appear on the front and back panels accompanied by black and white text warnings that will be in English on the front and in Kiswahili on the back.

The new requirements are included in the Tobacco Control Regulations Act 2014, which bans the manufacture, sale, import and distribution of devices designed to cover or detract from the health warnings.

Under the act, the ministry of agriculture is required to promote among tobacco farmers viable alternative crops.

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