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22nd Century purchases equipment out of bankruptcy

| December 5, 2013

22nd Century Group has purchased the cigarette production equipment used by the defunct Renegade Tobacco in Mocksville, North Carolina, USA. The Clarence, New York-based biotechnology firm intends to manufacture experimental and high-end cigarettes at the plant.

22nd Century paid $3.22 million for the equipment owned by GE Capital during a bankruptcy proceeding. In October, the company had already signed a lease agreement for Renegade’s 61,500-square-foot facility.

22nd Century plans to first manufacture Spectrum research cigarettes and shortly thereafter begin production of its Red Sun and Magic super-premium brands. The company also expects to enter into a manufacturing agreement with a strategic partner and to begin exporting its products in 2014.

22nd Century believes that having its own factory will create shareholder value as control and production of its differentiated tobacco products will be greatly facilitated and costs will be reduced. Until now, 22nd Century Group’s subsidiary, Goodrich Tobacco Co., had produced all of its products through contract manufacturers.

The company makes the Spectrum cigarette for the U.S. government, which is distributed under the direction of the National Institute on Drug Abuse, part of the National Institutes of Health. The Spectrum line includes a series of cigarette styles that have a similar tar yield, but varying nicotine yields.

Approximately one-third of the manufacturing equipment purchased will not be needed and is expected to be sold to other parties that have already expressed interest.

 

 

 

 

Promotions at Star Tobacco

| December 4, 2013

Star Tobacco International has made several corporate management appointments.

Baldev Mistry has been promoted to the position of vice president, African Region. In capacity, he will oversee all of Star’s commercial operations in Africa, as well as spearhead vertical integration projects in Kenya, Malawi, Tanzania, Uganda and Zambia. He will also be responsible for the group’s cloves business in Madagascar.

Akin Akdogan has been promoted to the position of commercial director for tobacco monopolies & group logistics. In addition to overseeing Star’s logistics and the group’s business with government tobacco monopolies, Akdogan will spearhead the expansion of the company’s “just-in-time” tobacco depots initiative in southern Europe and Asia.

Christopher Maan has been promoted to the position of commercial director for sales & marketing. In this capacity, Maan will be overseeing Star’s commercial sales worldwide with the exception of sales to tobacco monopolies and Asia.

PMI and JTI acquire stakes in Russian distribution firm

| December 4, 2013

Philip Morris International and Japan Tobacco International are acquiring equity stakes of 20 percent each in Megapolis Distribution, the holding company of CJSC TK Megapolis, a major distributor in Russia.

The companies are paying $750 million each for their stakes. If Megapolis’ operational performance meets certain benchmarks during the four fiscal years following the closing of the agreement, PMI and JTI will each pay an additional $100 million.

Megapolis is one of Russia’s leading consumer goods distributors focusing principally on tobacco and beverages. It employs almost 15,000 employees and commands a direct store delivery system that reaches more than 150,000 points of sale. Megapolis handles approximately 70 percent of the cigarettes sold in Russia through its distribution agreements with PMI, Japan Tobacco International and Imperial Tobacco Group.

“We are delighted to reach this agreement with Megapolis, our proven distribution partner, which will support our business expansion in this profitable market,” said Miroslaw Zielinski, PMI’s president, Eastern Europe, Middle East & Africa Region and PMI Duty Free.

“Megapolis has been our partner since 2007 and has contributed to JTI’s success in the important Russian market,” commented Kevin Tomlinson, JTI’s regional president, commonwealth of independent states. “This acquisition will strengthen their distribution platform allowing us to implement our growth strategy in the region more efficiently and effectively.”

Tobacco Solutions Asia installs first filter facility

| December 4, 2013

tsalTobacco Solutions Asia (TSAL) has commissioned its first filter rod manufacturing facility, in South Africa.

The machine comprises a Hauni KDF line capable of supplying monoacetate filters in various diameters and lengths. The capacity is 8,500 rods per minute.

“This completes TSAL’s first African project,” says Frederick Maan, business development manager, TSAL. “We are also completing other related factories in D.R. Congo, Madagascar and Zambia. Given the robustness of the South African cigarette market, the establishment of our first line in South Africa is appropriate.’’

According to TSAL, Africa has some of the world’s faster-growing cigarette markets after Asia.

TSAL is a tobacco technical consulting firm offering feasibility studies, blend development, factory design, factory equipment procurement, factory implementation and factory technical management, among other services. The company is a fully owned subsidiary of Star Tobacco International.

Liggett to enter US e-cigarette market

| December 3, 2013

Zoom picZoom E-Cigs, an indirect subsidiary of the Vector Group, is due to launch Zoom e-cigarettes nationwide in the U.S. from January, according to a Business Wire story.

Sales and distribution of Zoom’s first e-cigarette, a non-rechargeable product, will be managed by Liggett Vector Brands.

Zoom, a 100 mm, low-weight product with a soft-tip filter, will be available in tobacco and menthol flavors, in bold and smooth styles. It will sell initially in single and three-pack formats.

Developed in combination with XEO Int. Ltd., an e-cigarette design and engineering company based at Hannover, Germany, Zoom is said to feature an exclusive, 130 mAh battery that delivers at least 300 “TRU-PUFFS”: the equivalent of about two packs of conventional cigarettes. At the same time, Zoom products use a proprietary U.S.-made e-liquid.

“We have carefully developed our flavorful Zoom e-cigarette brand to appeal to adult smokers in the growing e-cig market, and we are confident that if the category continues to expand, we will succeed with this compelling product,” said Ron Bernstein, CEO of Liggett Vector Brands.

“We have drawn on our own industry experience and research, German precision engineering, quality U.S. e-liquids developed under the guidance of Liggett tobacco experts and Chinese manufacturing expertise to create Zoom, which we believe is the best disposable e-cigarette available today.”

Gamucci in deal with retailer Tesco

| December 3, 2013
Umer Sheikh, one of founders of Gamucci, enjoys an electronic cigarette while awaiting a flight.

Umer Sheikh, one of founders of Gamucci, enjoys an electronic cigarette while awaiting a flight.

Gamucci today announced a deal with Tesco that will see Gamucci’s e-cigarettes on sale in about 2,000 Tesco Express Stores and Tesco Filling Stations across the U.K.

“This further strengthens Gamucci’s retail footprint in the U.K. and follows similar tie-ups with Waitrose, WHSmith and other leading retailers both within the U.K. and overseas,” Gamucci said in a press note.

Gamucci’s products will be included in a Tesco fixture as part of an e-cigarette category that will appear adjacent to existing tobacco merchandising fixtures.

“The Tesco deal further cements our position as one of the U.K.’s leading brands,” said John Dunne, head of U.K. sales at Gamucci.

“As the electronic cigarette market continues to develop, product quality and brand loyalty are becoming increasingly important.

“As Gamucci fully owns our manufacturing facility and produces to industry-leading quality standards, we have quickly gained a reputation for supplying the best electronic cigarettes in the category.”

Last week, Gamucci unveiled what was said to be the world’s first custom-built e-cigarette airport vaping zone, located airside in Terminal Four at Heathrow Airport.

“The Gamucci Zone is the first airport venue to offer a designated indoor area where passengers can enjoy electronic cigarettes,” the press note said.

There are now an estimated 1.6 million people using e-cigarettes in the U.K., while the e-cigarette industry is worth at least $3.5 billion globally, according to Euromonitor International.

Gamucci is experiencing year-on-year growth of more than 2,000 percent, according to Nielsen.

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