JT playing catch up

Japan Tobacco Inc. plans to spend $500 million to quadruple its production capacity of smokeless-tobacco devices by the end of 2018 as it competes with Philip Morris for a bigger share of the Japanese vaping-products market, according to a story by Taiga Uranaka and Ritsuko Shimizu for Reuters.

Nicotine-containing e-liquids are banned in Japan under the country’s pharmaceutical regulations; so PM’s heated-tobacco product, iQOS, has created strong demand, while JT’s Ploom Tech device has been beset by delays.

JT’s CEO, Mitsuomi Koizumi, admitted that he had not foreseen the success of iQOS, which had captured about a 10 percent market share in April, up from 7.6 percent in January.

With more people shifting to heated-tobacco products such as iQOS, JT’s domestic cigarette sales volume is likely to fall 9.6 percent this year.

“It’s shocking,” Koizumi was quoted as saying. “I am doing this business for more than 35 years but I have never experienced losing 10 percent in volume in one year.”

The Reuters story is at: http://www.reuters.com/article/us-japan-tobacco-strategy-idUSKBN18P12F