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Iggesund’s US expansion points to global ambitions

| May 21, 2015

Iggesund Paperboard is expanding its distribution in the US by making its flagship product, Invercote, available coast to coast.

‘Increasing interest in Invercote’s unique properties from brand owners on the West Coast, and some key new business acquisitions made expanding west a natural next step,’ the company said in a press note.

‘ Iggesund Paperboard has established an inventory position and sheeting capabilities in Pomona, CA [California] with the objective of making Invercote readily available for quick turn market demand. The primary goal is to be able to serve the commercial print and packaging cluster in California and beyond.

‘Iggesund will focus its sales & marketing efforts on premium packaging and graphical print applications, building on the foundation of offset and digital print business recently established through a network of merchant distributors.’

Meanwhile, Rickard Österlindh, president Iggesund Americas said that the company had been in the US for more than 30 years but its distribution footprint had been concentrated on the east coast. “Now is the time to increase our presence on the West Coast, where we know there is a density of brand owners who will appreciate the quality level we offer with Invercote,” he said.

Enhanced distribution from coast to coast in the US is said to be just one step in Iggesund’s ‘overarching effort to become a unified global entity by strengthening its service platform outside Europe’.

Rickard Österlindh; looking west.

Rickard Österlindh; looking west.

Altria shareholders vote down farm labor issues

| May 21, 2015

At the Altria Group’s Annual Meeting of Shareholders yesterday, shareholders voted to defeat three stockholder proposals that had urged the company to take action on farm labor issues and tobacco use among the poor, according to a story by John Reid Blackwell for the Richmond Times-Dispatch.

The company’s board of directors had opposed the proposals.

During the meeting, Michael Crosby, a Catholic priest from Wisconsin and director of the Wisconsin Iowa Minnesota Coalition for Responsible Investment, said the company should take a stronger stand against the exploitation of undocumented migrant laborers.

The shareholder proposal he presented would have required the company to adopt a policy ensuring that its tobacco suppliers did not employ workers who had had to pay ‘recruitment fees’ to contract labor brokers to cross the US border.

Martin J. Barrington, Altria’s chairman, president and CEO, said the company opposed the use of forced or exploited labor, and that its supplier code of conduct reflected that. He said Altria had been involved in outreach and training programs for farmers to prevent exploitative practices.

Shareholders also voted down a proposal put forward by the AFL-CIO (The American Federation of Labor and Congress of Industrial Organizations) that would have required the company to publish a report on steps it has taken to address ‘green tobacco sickness’, which sometimes occurs when farm workers absorb nicotine through the skin after handling tobacco.

Altria says its contract with tobacco growers requires them to provide workers with personal protective equipment to avoid green tobacco sickness.

A third shareholder proposal was put forward by CHE Trinity Health, a Catholic health care organization, asking the company to prepare educational and tobacco-cessation materials for smokers who ‘live below the poverty line or have little formal education’. That proposal was defeated, too.

Following the meeting, Altria’s board of directors declared a regular quarterly dividend of $0.52 per share, payable on July 10 to shareholders of record as of June 15. The ex-dividend date is June 11.

Blackwell’s story is at: http://www.richmond.com/business/local/article_3694c4aa-513c-5bd2-9e65-c07c12df5914.html.

Altria’s meeting press note is at: http://www.altria.com/Media/Press-Releases/Pages/PressReleaseDetails.aspx?reqID=2051871.

Leaf oversupply situation might be extended

| May 20, 2015

Global leaf tobacco inventories are high and might ‘have the effect of extending the duration of the oversupply conditions’, according to George C. Freeman, III, chairman, president, and CEO of Universal Corporation.

Commenting on Universal’s fourth quarter and full-year results, Freeman said he was pleased with the results the company had achieved, given fiscal year 2015′s oversupplied market conditions.

‘We ended the year with strong fourth quarter results, which helped to bring our segment operating earnings for the fiscal year in line with our expectations,’ he said. ‘We also realized higher margins, maintained our solid financial position, and returned over $90 million to our shareholders in dividends and share repurchases this fiscal year. Our performance demonstrates our ability to execute well on our objective of delivering a compliant product in an efficient manner to our customers, under challenging circumstances.

‘We are well-positioned as we enter fiscal year 2016 with substantial cash balances and manageable uncommitted inventory levels.

‘Markets in Africa and Brazil have opened at a similar pace compared to last year, and crop qualities are mixed, with production volumes expected to be lower in most origins.

‘Although we are not seeing significant delays in customer orders, we expect shipping instructions to be weighted towards the second half of our fiscal year.

‘In addition, while our own leaf inventories are well-managed, global tobacco leaf inventory volumes are high. This may have the effect of extending the duration of the oversupply conditions, despite reduced new crop production and a more positive outlook for demand from some customers based on recent recoveries in certain of their retail markets.

‘Looking beyond near-term market conditions, we are optimistic about the future as we believe there are several trends in our business that could provide opportunities for us to increase our market share and to offer additional services to our customers…’

Universal announced that net income for the fiscal year ended March 31, was $114.6 million, or $4.06 per diluted share, down from last year’s net income of $149.0 million, or $5.25 per diluted share. Excluding one-off items in both years, net income for the fiscal year increased by $1.2 million, or $0.07 per diluted share.

Segment operating income, which excludes one-off items, was $167.2 million for fiscal year 2015, down $8.0 million from that of the previous year. The reduction was said to be been primarily attributable to fiscal 2015′s lower sales volumes, partially mitigated by a reduction in selling, general, and administrative costs.

Revenues of $2.3 billion for fiscal year 2015 were down by 11 percent compared with those of the previous year, driven mainly by the lower volumes and ‘modestly lower green leaf costs’.

JT aiming to make Winston No.1 through accretion

| May 20, 2015

Japan Tobacco Inc. says that its Cabin and Caster cigarettes are to be ‘integrated’ with its Winston brand as part of the company’s mid- to-long term strategy of making Winston the global No.1 brand.

Winston is one of the company’s Global Flagship Brands and, while Cabin and Caster will each retain their original taste and flavor, the idea is that they should share Winston’s ‘global identity’.

Cabin and Caster, which have been on sale in Japan since 1978 and 1982 respectively, are destined to become Winston Cabin and Winston XS Caster in August. They are due to appear in redesigned packaging in the middle of October.

Winston was launched in the US in 1954 and, in 2007, was recognized by Euromonitor as the second largest tobacco brand.

Currently, it is sold in 111 countries, including Japan, and JT says that it intends to continue to expand its geographical presence by responding to consumer preferences around the world.

US city considers tobacco retail bans and restrictions

| May 20, 2015

A US city council has passed the first reading of a proposed measure to restrict severely retail sales of tobacco and related products, according to an Associated Press story relayed by the TMA.

The proposed measure by the council of Sonoma, California, would ban new businesses from selling cigarettes, cigars, smokeless tobacco and certain other tobacco products.

And it would prohibit existing businesses from selling electronic cigarettes, cigars that retail for under $5 each, and most flavored tobacco products except flavored pipe tobacco.

The bans and restrictions would be effective from September 1.

The measure would require also that the 15 existing tobacco product retailers pay $246 each to obtain licenses.

The council is expected to vote on the measure for a second time in June.

Sonoma began considering the regulations in 2014 after the American Lung Association gave it an ‘F’ for some of its tobacco control efforts.

Indonesia to bring in electronic cigarette ban

| May 20, 2015

The Indonesian government plans to ban the sale of electronic cigarettes amid ‘growing concerns over the product’s negative impact on people’s health’, according to a story in The Jakarta Post.

The Post reported that one in five Indonesians currently smoked and that ‘a high number’ of those smokers were using electronic cigarettes to help them quit the habit, ‘said to cause various serious illnesses, including cancer, chronic respiratory problems and cardiovascular diseases’.

Nevertheless, the Trade Minister Rachmat Gobel said on Monday that sales of electronic cigarettes would be banned in line with concerns recently voiced by the Health Ministry.

“It has been deemed that e-cigarettes pose health risks and that’s why we need to impose a ban,” he said.

There are no domestic electronic cigarette producers; so consumers are said to rely on imports from China.

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