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PMI to host results webcast July 16

| July 10, 2015

Philip Morris International is due to host a live audio webcast at 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

An archived copy of the webcast will be available at until 17.00 on August 14.

Slides and the script will be available at

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.

France bans smoking in cars with young passengers

| July 3, 2015

It is now illegal in France to smoke in a car when a person younger than 12 years of age is a passenger, according to a story in The Local France.

Those caught breaking the law will face a fine of €68.

But smokers needn’t think they are being singled out. The Local pointed out that, as always on July 1 in France, a raft of new laws has come into force this year.

For instance, drivers are at risk of being fined €135 if they’re caught using headphones and earpieces, and they can be fined €75 for eating sandwiches, putting on make-up or listening to loud music.

‘It’s all designed to allow drivers in France to improve their concentration levels, which can’t be a bad thing,’ said The Local.

Brands to go in Germany after TPD brought in

| July 3, 2015

The new EU Tobacco Products Directive (TPD) will result in cigarette brands with a market share of 1 percent or less being taken off the German market, according to a Die Welt story.

Such brands would no longer be profitable, the newspaper said.

Under the TPD, which has to be included within national laws by next year, two-thirds of the surfaces of cigarette packages will have to be covered with graphic and written health warnings.

Die Welt said that not all cigarette brands would survive that change.

The change would be too expensive in respect of certain niche products, Ralf Wittenberg, the CEO of British American Tobacco Germany, was quoted as having said.

BAT now sells 16 brands in Germany but the figure was expected to drop to six after the TPD changes.

New high-capacity flavor applicator from Kaymich

| July 3, 2015

C. B. Kaymich is launching two new pieces of equipment: its new High Capacity Gemini Flavour Application System and the CM7A7Ax Hot Melt Controller.

Orders for the first two Gemini units have been taken and they will be installed during the next eight weeks.

In reporting the launch of the new Gemini, Kaymich said that it had seen a significant increase in the manufacture of ‘product having significantly higher dosages of flavour, specifically menthol’.

But it said there had been two significant technical obstacles to overcome in developing the higher capacity unit. A significant increase in pump capacity of up to a litre of delivered fluid per minute had been required without sacrificing the delivery accuracy of +/-1 percent or consistency across a range of doses.

The other technical obstacle that had been successfully overcome had to do with melt capacity. ‘Applying pure menthol without a carrier reduces material costs and increases potential dosing per rod,’ Kaymich said in a press note. ‘It also requires a higher melt capacity when applying high dosage at high speed.’

Kaymich reported that it now used a new pump significantly higher in capacity – up to one litre per minute depending upon materials – yet still capable of maintaining accuracy of +/-1 percent flow across a range of dosages between 0.91 ml per minute and ≥1000 ml per minute, depending on the materials used.

‘Whilst delivery accuracy is reliant upon the pump, any fluctuations due to outside factors such as fluctuating machine speed, are monitored using a none-invasive flow meter, which eliminates any negative effect on the flow rate of monitoring delivery rates,’ Kaymich said. ‘Any out of tolerance product is identified and rejected. In this way the consistency of product progressing through the cigarette manufacturing process is guaranteed.

‘The second technical obstacle to high speed, high dosage application was the capacity of the tanks and their ability to melt flavour (menthol). Gemini has two 50 litre tanks which normally expect to have menthol melted ready for dispensing inside ninety minutes. To assist in the process of maintaining a supply of molten menthol for application by the Gemini, a re-circulation system has been developed to further reduce the melt time.

‘Using the feedback provided by level sensors in the tanks, flavour supply to the pump is alternated between the two 50 litre tanks ensuring continuity of supply and, subsequently, production. The large tank capacity means that operators are free to get on with their “day job” of making rather than managing the flavour application system and specifically the supply of flavour.’

Meanwhile, Kaymich announced too the launch of its new hot melt controller which replaces the now obsolete CM7A, CM7A1, CM7A2, CM7A3 and CM7A4 industry standard digital controllers.

‘The CM7A7Ax is easier to configure, easier to use and offers improved accuracy in terms of temperature control,’ said Kaymich in a second press note.

‘Gradual obsolescence of electronic components provided the need for a new controller which is now available as a direct replacement for existing units.

The main circuit board has been fully re-designed to incorporate contemporary technology and components and is fully backwardly compatible with the CM7A range of controllers.

‘The CM7A7Ax provides control for three-zone gravity fed hot-melt systems. It incorporates the necessary interface connections on the rear panel for heated zone power, heated zone temperature measurement, main input power and host machine control signals.

‘Each zone set-point temperature can be individually configured as appropriate for the installation via the in-built temperature controllers via the unit front panel.

‘Heated zone temperature measurement can be achieved using industry standard PT100 sensors or thermocouples. These are preconfigured during manufacture, but can be altered by trained service technicians if necessary, making the controller suitable for use in different installations.’

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