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Egypt to construct tobacco-processing factories 

| April 23, 2015

The Egyptian government plans to construct two tobacco-processing factories in Malawi to support the country’s tobacco industry, according to the Malawi News Agency.

The Egyptian Ambassador to Malawi, Maher El-Adawy, said the construction of these factories will help spur economic growth because the crop is regarded as the country’s main forex earner.

“We have always been in a good relationship with Malawi, and we are happy to support it, especially in the tobacco industry because we know that tobacco is the main forex earner, and by doing so we will help the country’s economy to grow,” El-Adawy said.

El-Adawy also indicated that construction of the two factories will not only spark economic growth, but also aid in job creation.

“We believe the construction of the two factories will also create employment for some quarters of the Malawian society thereby helping them to improve their lives,” he said.

According to the World Bank, 90 percent of Malawi’s tobacco is exported to other countries for processing due to the country’s currently limited tobacco-processing capabilities.

“Much of our tobacco is exported for processing because we do not have the capacity to do so,” said Malawi’s minister of information, tourism and culture, Kondwani Nankhumwa. “So by having these two tobacco processing factories, Malawi will start processing the tobacco on its own and sell the products on our own for a profit.”

One factory will be built in Lilongwe; the location for the second factory is still being decided by the government. Construction of both factories is expected to begin soon, according to El-Adawy.

Malawi is one of the top 10 producers of tobacco in the world, with the crop accounting for the majority of the country’s agricultural export earnings.

Closures expected in Indonesian tobacco industry

| April 23, 2015

As much as 15 percent of the workforce at tobacco-related companies in East Java, Indonesia—or more than 23,000 workers—are at risk of being laid off this year, according to a story in the The Jakarta Post.

Based on 2014 data, the number of people working in East Java’s tobacco and tobacco products industrial (IHT) sector was 159,117, according to East Java Chamber of Commerce and Industry (Kadin) vice chairman Dedi Suhajadi. The sector’s workforce also decreased by 21,300 workers in 2014 from 180,466 workers in 2013.

“Many IHT entrepreneurs are affected,” Dedi said. “This is attributable to the annual increase in tobacco tax, government regulations and groups that interfere with the concentration of IHT entrepreneurs in meeting tax obligations.”

The government raised the IHT tax target to IDR141.7 trillion in 2015 from IDR111.21 trillion in 2014. Over the past five years, the average increase in IHT tax was 16.09 percent.

Data from the East Java Manpower and Transmigration Office indicated that 790 IHT companies were still operating in 2014, however, only about 200 were producing on a regular basis. In 2011, there were about 1,100 cigarette factories, according to Dedi.

“Those that have gone out of business are small- and medium-scale factories. Only the large-scale companies are surviving,” said Dedi.

Between 2009 and 2013, approximately 4,900 cigarette factories closed their doors.

South Korea considers stricter e-cigarette regulations

| April 23, 2015

The government of South Korea plans to push for tougher legal restrictions on the sale of e-cigarettes, the finance ministry announced April 22. Finance Minister Choi Kyung-hwan, who also serves as deputy prime minister, told lawmakers in the National Assembly that he would soon “come up with a comprehensive proposal” on e-cigarettes that would ban explicit advertisement of the products, according to a story in The Korea Herald.

According to the country’s health and welfare laws, tobacco product advertising is only allowed inside authorized stores, however, many local e-cigarette dealers explicitly display advertisements and fliers for the products—which are officially classified as cigarette products—on the streets.

“We will see to a comprehensive measure in cooperation with other related ministries,” Choi said.

Strict laws to limit tobacco ads in China

| April 23, 2015

Lawmakers in China may introduce tough new restrictions on tobacco advertisements, according to a story in the China Daily. A draft revision to the country’s 20-year-old Advertisements Law will be voted upon tomorrow; the revision was discussed Tuesday at the bimonthly session of the Standing Committee of the National People’s Congress and is likely to be ratified.

The draft indicates that no tobacco advertisements should be displayed in public places or published in mass media outlets. While many lawmakers advocate a complete ban on tobacco advertisements in China and maintain that public health should be the country’s top priority, others recognize that the production of tobacco provides a significant source of income for farmers who reside in areas that are not suitable for other types of agriculture.

China signed the World Health Organization’s Framework Convention on Tobacco Control in 2003.

Philip Morris Korea to increase exports

| April 21, 2015

Philip Morris International Korea (PMIK) will increase its cigarette exports to an expected 20 billion sticks this year after securing larger markets in Japan and Australia.

The company will expand its export of cigarettes manufactured in its factory in Yangsan, South Gyeongsang Province, in an effort to make up for domestic losses caused by a tobacco tax hike that went into effect on Jan. 1. The bill—which increased tobacco prices to won4,500 per pack from the average won2,500 per pack—resulted in significant decreases in sales for tobacco makers operating in the country. PMIK’s sales dropped by approximately 18 percent in the first quarter of 2015 compared to the first quarter of 2014.

In 2012, the company invested approximately won200 billion into the Yangsan factory to expand its packaging facilities and add raw material processing facilities. Today, the factory has the ability to produce 40 billion cigarettes per year, double its prior manufacturing capacity.

“Since 2012, our exports grew more than 10 times, thanks to the increased capacity in Yangsan factory, as well as the growing quality,” said Mikhail Prokopchuk, PMIK’s director of operations.

Exports from the Yangsan factory to Japan, Australia, Singapore, Taiwan, Hong Kong and Macua have increased dramatically since manufacturing capabilities were expanded, with export volumes increasing from 900 million cigarettes in 2012 to 4.5 billion cigarettes in 2014.

Vapor Corp. announces organizational restructuring

| April 20, 2015

Vapor Corp.—a leading U.S.-based distributor and retailer of vaporizers, e-liquids, e-cigarettes and e-hookahs—has announced that it is undergoing an organizational restructuring to maintain its competitiveness and establish its branded products and retail stores in the evolving vapor market.

Following a recent merger with Vaporin, Vapor Corp. added several new members to its management team, including president and director Gregory Brauser, chief financial officer James Martin and new board member Robert Swayman.

To further establish its national distribution network, Vapor Corp. has developed new supply deals with key retailers and reorganized inventory in an effort to meet an increasing demand for vapor products. Vapor Corp. also recently opened three new “The Vape Store” locations in Orlando, Florida, and one in Port Charlotte, Florida. The company plans to open an addition 20-30 branded retail “The Vape Stores” before the end of FY 2015.

“With new management, new stores, new deals and new products, Vapor Corp. is well positioned to rise above the competition and take a leadership role in what is currently a highly fragmented e-cig and vaporizer market,” said Brauser. “Vapor Corp.’s merger with Vaporin served as a catalyst for the company’s future success and has helped to pave the way for us to cast a wider net in the industry. Our goal is to reach new and veteran vaping consumers and continue to spread the word about our stores and our products.”

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