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Essentra exporting UK production jobs to Hungary

| July 10, 2015

About 200 people are set to lose their jobs following an announcement on Wednesday by Essentra Plc that it planned to close its factory at Jarrow, UK, by the end of this year, according to a story in the Shields Gazette relayed by the TMA.

The current Jarrow production is to be shifted to Hungary.

Essentra was said to have begun a 45-day consultation period to discuss the site closure with those affected, though there was no suggestion that the discussions would reduce the number of job losses.

Essentra Europe managing director Hugh Ross was quoted as saying that cigarette volumes in Western Europe had declined by almost 30 percent during the past 10 years.

Consumer demand was shifting from ‘mature Western countries to the more dynamic, developing markets in Eastern Europe’.

Cigarette companies that bought filters from Essentra had responded to this trend by relocating production to Central and Eastern Europe.

Only a small percentage of the current filter production at the Jarrow facility was destined for the UK market.

Zimbabwe growers suffer 7.5 percent fall in prices

| July 10, 2015

The average grower price for Zimbabwe flue-cured so far this season is down by 7.5 percent on that at the corresponding point of the 2014 season, according to a story by Munesu Nyakudya relayed by the TMA and quoting Tobacco Industry and Marketing Board (TIMB) figures.

So far, growers have sold 178.9 million kg of flue-cured for US$525.9 million; or an average price of US$2.94 per kg.

At the same point of last season they had sold 196.6 million kg of flue-cured for US625.1 million; or an average price of US$3.18 per kg.

Flue-cured has been in oversupply recently; so it has been a buyers’ market in Zimbabwe and elsewhere.

Growers in Andhra Pradesh, India, have been having a hard time selling their tobacco at all.

JT’s domestic cigarette sales increased in June

| July 10, 2015

Japan Tobacco Inc’s domestic cigarette sales volume during June, at 9.3 billion, was increased by 4.6 percent on that of June 2014, 8.9 billion, according to preliminary figures issued by the company today. The June 2014 figure was down by 6.5 percent on that of June 2013.

Volume during January-June, at 53.1 billion, was down by 3.7 percent on that of January-June 2014, 55.1 billion, which was down by 1.8 percent on that of January-June 2013.

JT’s market share stood at 60.2 percent during June, at 60.0 percent during January-June, and at 60.4 percent during January-December 2014.

JT’s domestic cigarette revenue during June, at ¥52.6 billion, was increased by 4.8 percent from its June 2014 level, ¥50.2 billion, which was down by 3.6 percent on its revenue of June 2013.

Revenue during January-June, at ¥300.9 billion, was down by 1.8 percent on that of January-June 2014, ¥306.4 billion, which was down by 0.7 percent on its revenue of January-June 2013.

PMI to host results webcast July 16

| July 10, 2015

Philip Morris International is due to host a live audio webcast at www.pmi.com/webcasts starting at 09.00 Eastern Time on July 16 to discuss its 2015 second-quarter results, which will be issued about 07.00 the same day.

During the webcast, which will be in listen-only mode, CFO Jacek Olczak will discuss the results and answer questions from the investment community and news media.

The audio webcast can be accessed also on iOS or Android devices by downloading PMI’s free Investor Relations Mobile Application at www.pmi.com/irapp.

An archived copy of the webcast will be available at www.pmi.com/webcasts until 17.00 on August 14.

Slides and the script will be available at www.pmi.com/earnings.

U.S. Tobacco Cooperative pays member growers $5.6 million in cash dividend

| July 9, 2015

The board of directors of the U.S. Tobacco Cooperative (USTC)—a leading producer and processor of high-quality U.S. flue-cured tobacco headquartered in Raleigh, North Carolina, USA—has declared a patronage dividend of $0.17 per pound of tobacco sold to the Cooperative during fiscal year 2015.

The total dividend for fiscal year 2015 was $10.7 million, a 9.1 percent increase over the previous year’s dividend. The Cooperative has authorized a cash payment of $0.09 cents per pound to be paid immediately and to allocate $0.08 cents per pound to each grower’s account in certificates of interest.

The board of directors also authorized the Cooperative to pass its $7.3 million Section 199 Domestic Production Activities Deduction to its growers—an average of $0.116 per pound. Although the Cooperative is entitled to take this tax deduction on its federal income taxes, the company will instead pass the deduction along to its growers. The tax deduction is intended to offset the taxes owed on the cash dividend for growers who are able to take advantage of it.

“The past year has brought many changes in our business and many challenges,” chairman Jimmy Hill and CEO Stuart Thompson stated in a press release. “Your Cooperative is undergoing significant changes to position USTC as the premier U.S. leaf supplier. Our board and management team are deeply committed to looking for ways to maximize patronage dividends. We are the only U.S. leaf supplier that reinvests its profits in its grower base. Over the last five years, the Cooperative has declared dividends totaling $37.9 million. You produce the highest quality, most compliant, most sustainable tobacco crop in the world. We want to encourage you in your commitment to excellence. Tobacco manufacturers are demanding more and more from you. We want to do everything we can to support and reward you for your efforts.”

Malfeasant smugglers and their flying machines

| July 3, 2015

Measures aimed at combating corruption, enforcing border controls and enhancing cross-border co-operation are being constantly revised in the fight against the illegal tobacco trade operating across Romania’s borders with non-EU countries.

This was part of the reply by the EU Commission to a question posed by the Romanian member of the European Parliament, Daniel Buda.

In a preamble to his question, Buda said that the proceeds from the smuggling of Ukrainian cigarettes were very high; so smugglers were willing to try ever-more ingenious ways of bringing these products into Romania.

Some brought their cigarettes through the Halmeu Customs, showing boundless ingenuity in creating hiding places in car bodywork.

Some put the dual citizenship law, adopted by Hungary, to their use. When caught with cigarettes for the first time, smugglers from Ukraine and Satu Mare, Romania, presented identity documents issued by Hungary. When they were caught again, the smugglers presented identity documents issued by Romania or Ukraine.

Yet others came into Romania over the green strip, using powerful all-terrain vehicles, carts, horses and even bicycles.

And recently, smugglers had begun to use ‘light flying machines’ to bring cigarettes into Romania.

‘What recommendations can the Commission make to the Romanian authorities to limit smuggling on the Romanian borders?’ Buda asked.

In its written reply, the Commission said it and member states had already taken several actions to curb the illegal tobacco trade, in particular at the EU’s Eastern borders. ‘In 2011, the Commission presented a Staff Working Paper to address problems identified in that particular area,’ it said. ‘The Commission adopted a comprehensive strategy on stepping up the fight against cigarette smuggling and other forms of illicit trade in tobacco products more generally in 2013.

‘As concerns the illicit tobacco trade at the Romanian external border, the Commission’s European Anti-Fraud Office (OLAF) co-operates with the EEAS (European External Action Service) and EUBAM (EU Border Assistance Mission to Moldova and Ukraine) within the scope of its mandate. In this regard, specific recommendations such as anti-corruption measures, enforcing border controls and the enhancing of cross border co-operation are constantly revised.

‘At the operational level, a Joint Customs Operation (JCO ROMOLUK) involving the customs, police and border forces of Romania, Moldova and Ukraine was conducted in spring 2013. Like any other JCO, ROMOLUK was a co-ordinated and targeted action of a limited duration with the aim of combating the smuggling of sensitive goods and fraud in certain risky areas and/or on identified trade routes. OLAF provided the necessary support for the Romanian, Ukrainian and Moldovan authorities to conduct co-ordinated actions. JCO ROMOLUK helped to improve risk indicators and led to recommendations to improve the effectiveness of customs controls.’

The Commission said that it encouraged third countries to join the Protocol to Eliminate Illicit Trade in Tobacco Products of the World Health Organization’s Framework Convention on Tobacco Control.

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