Japan Tobacco will invest ¥300 billion ($2.25 billion) in its tobacco-heating products (THPs), with ¥200 billion designated for marketing the sticks internationally, reports Nikkei Asia
“Last year, we couldn’t make the investment because there were not enough [heated-tobacco] devices due to the semiconductor shortage,” Japan Tobacco President Masamichi Terabatake was quoted as saying. “For 2023, we are back on track for procurements, and we are able to secure more than twice Japan’s supply volume compared to last year.”
JT plans to roll out its Ploom X THP in more than 10 countries this year, reaching at least 20 new countries by the end of 2024. Currently available only in Japan and the U.K., the product is set to debut in Italy this month.
To gain name recognition, JT will invest in pop-up shops and digital sales. It will develop flavors that match the tastes of each market.
In the U.S., JT formed a joint venture with Altria Group. The partners will seek permission from the Food and Drug Administration to market Ploom by early 2025.
While JT’s THP segment is currently in the red due to the forward investments, the company anticipates turning a profit in 2028 on overseas growth.
JT will also invest in research and development, looking to develop the second generation and third generation of Ploom X devices.
Global sales volume for cigarettes shrank 1.5 percent last year, JT said. By contrast, the global market for THPs last year grew 17 percent to $33.4 billion, according to Euromonitor International.