Year: 2023

  • Iranian Tobacco Co. to Build in Zimbabwe

    Iranian Tobacco Co. to Build in Zimbabwe

    Photo: www.akolosov.art

    The Iranian Tobacco Co. (ITC) will build a cigarette factory in Zimbabwe, reports Press TV.

    According to local media reports, ITC CEO Mohammad Sheikhan and Zimbabwe’s agriculture minister, Anxious Jongwe Masuka, signed an agreement in Harare on Jan. 26.

    The facility will manufacture ITC’s Bahman brand using Zimbabwean leaf tobacco. As part of the agreement, Zimbabwe will also supply tobacco for cigarette manufacturing in Iran or for re-exports to Central Asia.

    Other Iranian-made cigarette brands will be exported to Zimbabwe under the deal.

    Iran’s tobacco sector has grown in recent years amid lower imports of international brands and increasing demand for local products.

    The boom has enabled the ITC to revive idle plants and to start exporting to several countries in West and Central Asia.

    The company’s planned cigarette factory dovetails with Zimbabwe’s ambition to move up the tobacco value chain. While the country exports hundreds of millions of kg of leaf each year, most of the value is captured by the buyers who process the tobacco into consumer products.

    The country aims to generate US$5 billion from tobacco by 2025, up from US$1 billion today.

  • Arthur J. Schick Jr. Joins Universal Board

    Arthur J. Schick Jr. Joins Universal Board

    Image: Tobacco Reporter archive

    Arthur J. Schick Jr. will join Universal Corp.’s board of directors on April 1, 2023, at which time the board will expand to nine directors, eight of whom are independent, according to the company.

    “We are thrilled to welcome Art Schick to our board of directors,” said George C. Freeman III, chairman, president and CEO of Universal Corp. “Art is an experienced, well-respected global consumer products executive with in-depth knowledge of the food and beverage industry, and he has deep-rooted expertise and knowledge of the ingredients industry from the top down. He brings tremendous value to Universal, with over four decades of experience in ingredients, strategic supplier development, procurement, operations, international supply chain management and product research and development.”

    Schick is a 35-year veteran of PepsiCo, where he served his last 17 years as the vice president of proprietary flavors within the beverage concentrate division. In that role, Schick led PepsiCo’s organization that manufactured all proprietary flavors for the company’s global beverage brands and led the global sourcing strategies and supply chain management for the organization. Schick also spent over a decade as a contributing board member for the Flavor Extract Manufacturers Association (FEMA), the premier national association of the U.S. flavor industry, serving as FEMA’s president in 2013. Schick currently serves as president of Alpha Sierra Global, a company providing strategic and operational consulting to companies focused on consumer products, flavor compounding and ingredients.

    “When presented with the opportunity to serve on Universal’s board of directors, I was impressed with the company’s long and successful history in international tobacco operations, and I was excited about the tremendous upside potential for the company as it expands its plant-based ingredients platform,” said Schick. “Universal already has a strong foundation and sustainable strategy to position itself as a leader in the ingredients space. I look forward to working with my fellow directors and the company’s management team as Universal charts its course for a bright future.”

  • Essentra Filters Rebrands as Filtrona

    Essentra Filters Rebrands as Filtrona

    Following the announcement about a change of ownership, the former filters and tapes businesses of Essentra will now begin the process of rebranding as Filtrona.

    “This is an exciting time for our business, marking a new chapter in our journey to build a global market-leading company that supports our partners to transform and grow,” said Filtrona CEO Robert Pye in a statement.

    “Many of our customers and suppliers will know that Filtrona was the company name prior to rebranding to Essentra plc. Having talked to them about our plans, it was clear that the Filtrona name represented a rich history of innovation and partnership. It was only right that we adopted the brand again, which had such a strong foundation, and gave it a fresh contemporary design to take us forward.”

    With its rebrand well underway, the business enters 2023 with exciting plans for the future.

    “Both the tobacco and packaging industries are focused on driving innovation in response to ever-changing consumer preferences,” says Pye. “Our customers therefore need global partners that are investing in the future of their business.

    “At Filtrona, we now have a truly global presence with facilities in all major markets worldwide supported by a 2,000-strong team of talented employees working across our 11 manufacturing locations, 3 innovation centers, an accredited laboratory and a center of excellence focused on sustainability. Our mission is to be a responsible, customer-focused innovation leader creating excellence in sustainable solutions for today and tomorrow. We look forward to delivering on this commitment.”

    “We are delighted to welcome Filtrona into our diverse portfolio,” said a representative of the new shareholder. “The business has a rich heritage in providing innovative solutions to a well-established customer base with a global footprint, high quality people and exciting prospects. We continue to support our partners through the next phase of growth relying on our combined expertise in identifying and unlocking value creation opportunities.”

  • An Essential Component

    An Essential Component

    Nina Ritter-Reischl |Photo: Glats Feinpapiere

    Manufacturers of tipping papers adapt to a changing cigarette market.

    TR Staff Report

    Valued at $1.6 billion in 2021, the global cigarette paper market is projected to reach $2.2 billion by 2031, according to Allied Market Research. Tipping base paper represents only a small part of this market but is an essential component in cigarette construction, where it has to meet many requirements.

    “As tipping base paper is a printing paper, the printability is most important,” says Nina Ritter-Reischl, CEO of German cigarette paper manufacturer Glatz Feinpapiere. “Printability is mainly depending on sheet formation and smoothness as well as the sizing. The latter is important to prevent color bleeding in the printing process. Our papers show a very good printability due to their formation and constant quality parameters, especially in sizing. Our know-how in tipping base paper goes back for decades and is one of our main assets.”

    Other considerations are water absorption, which determines ink absorption; smoothness, which plays a role in printability; and a “dynamic contact angle” for the gluing process; along with flammability, according to Liem Khe Fung, Innovation Center director at Indonesian cigarette paper manufacturer BMJ.

    Liem Khe Fu

    “The print quality of BMJ’s tipping base paper is excellent,” says Liem. It allows for 12-color print and the inclusion of tactile and embossed features along with security features. Flavored and sweetened papers are also possible, according to Liem. The company started to significantly supply the market only a few years ago, so the potential growth for BMJ in this field is still high, according to Liem.

    Ritter-Reischl views her company as a specialist for tipping base paper within the cigarette industry. “Therefore, we started focusing even more on our tipping base paper customers and were able to raise our sales within this market segment,” she says. “Tipping base paper customers are demanding and have high quality standards; they expect close customer relationships and interlinks in addition to excellent services. Those are challenges we can meet and are specialized in. As an example, we even deliver our tipping base paper with our own transportation company to one of our most valued customers, door to door every day.”

    The tipping base paper market has become highly competitive. Liem, whose company mainly caters to the Asian market, says that price competition is the main challenge, followed by small order quantity per stock-keeping unit.

    Julius Glatz is strong in Europe. “However, we also deliver to Asia and Latin America as there are printers too,” says Ritter-Reischl.

    As tipping base paper is an essential part of the cigarette, the tipping base paper market is facing the same challenges as the cigarette market in general. “Rising inflation and therefore declining purchasing power of consumers, political instability, rising costs and stumbling logistics worldwide are afflicting the market,” says Ritter-Reischl.

    Following a modest uptick during the Covid-19 pandemic, when many people where stuck at home, global cigarette consumption has resumed its long-term decline. In 2024, Statista projects volumes to shrink by 0.4 percent. That still leaves a market of around 5 trillion cigarettes, however—and the vast majority of them will require a tipping paper.

  • Exploring ‘Belated’ Mortality

    Exploring ‘Belated’ Mortality

    Photo: Nopphon

    How did the 1980–2020 fall in U.S. smoking incidence impact smoking-related deaths?

    By George Gay

    I have a question. What proportion of smokers die “belatedly,” a word I shall use to mean later than predicted or expected, the opposite of “prematurely”? What I am getting at is, if, as I am told, 50 percent of smokers die prematurely from smoking-related diseases and, as I assume, X percent of smokers die prematurely from nontobacco-related causes, unless X is equal to 50, there must be a proportion of smokers who either die on their allotted day or after their allotted day, either from a tobacco-related disease or other causes. But you rarely hear of these people outside of the odd sensational newspaper story that tells how Joan Naughtie has just celebrated her 105th birthday with a cigarette, a glass of whiskey and a bout of raunchy, unprotected sex.

    There are probably a number of reasons why you rarely hear about these people, one of which is that they are an embarrassment, especially in the case of the Joan Naughties of this world who have clearly been having too much fun.

    But firstly, it is necessary to be clear what we mean by a smoker dying prematurely, on time or belatedly. Although it is difficult to impossible to prove a negative, experience tells me that none of us comes into this world tattooed or otherwise marked with a use-by date, so the day on which we are “supposed” to die must be predicted in some way by people who dabble in necromancy, I assume on the basis of past years’ age-related death statistics. I don’t know how sophisticated longevity figures are, but what I see usually are nationwide figures, stated separately for men and women. I trust the breakdown is more intricate than this, however, because, in a country such as the U.K., for instance, where inequality is rife, longevity varies hugely by region, so judging whether a smoker died prematurely against a national average would lead to overestimations.

    Given such concerns, I think that, in the cause of balance, the percentage of smokers who die belatedly should from now on always be stated whenever the percentage of smokers who die prematurely of smoking-related diseases is given.

    I wrote above that the number of smokers who died on their allotted day or after was an embarrassment, and one reason is that they, especially those who die not of a smoking-related disease, give the lie to the general statement that “smoking kills.” Smoking might be the indirect cause eventually of the deaths of a proportion—even a high proportion—of smokers, but, if I am correct in my assumptions above, given that people smoke and live beyond their allotted lives, it cannot be stated, without caveat, that smoking kills.

    One other embarrassment concerns whether, given that it is claimed that smokers who die before their allotted time die because of their smoking unless there is clear evidence to the contrary (they were hit by a bus, perhaps), it can be said that smokers who die after their allotted time live longer because of their smoking, unless there is clear evidence to the contrary (they were genetically modified, perhaps).

    Cause and Effect

    I started to think about such things after reading what struck me as a strange story in The Hill titled “Despite drop in popularity, cigarette smoking continues to be a leading cause of U.S. cancer deaths.” The story was based around some figures from the oddly named U.S. Centers for Disease Control and Prevention (CDC) and new research from the American Cancer Society. The CDC input was that the cigarette smoking rate in the U.S. dropped from 33 percent in 1980 to a little above 12 percent in 2020.

    The story followed up these figures by saying, in part: “But new research from the American Cancer Society shows smoking is still taking a huge toll on American life expectancy and the economy. According to a new study published in the International Journal of Cancer, nearly 123,000 U.S. cancer deaths were caused by cigarette smoking in 2019, making up close to 30 percent of all cancer deaths for that year. Cancers associated with smoking included cancers of the oral cavity, pharynx, esophagus, stomach, lungs and bronchus, among others.”

    This is interesting as far as it goes, but it was what was not revealed that I found frustrating and interesting. Nowhere in the story does it say whether the fall in the incidence in smoking between 1980 and 2020 was mirrored by a fall in smoking-related deaths. Clearly, this is the critical point because if the fall in the incidence of smoking-related deaths has mirrored or closely followed, at a certain time remove, the fall in the incidence of smoking, then many of the claims and assumptions that have been made surrounding smoking and its effects will have been confirmed. However, if there is a largish variation, then questions need to be asked. We certainly need to know if the fall in the incidence of smoking-related deaths in the U.S.—I take it there has been one, though you wouldn’t know from the story—has fallen behind or raced ahead of the fall in the incidence of smoking. And, in either case, we need to know why what has occurred has occurred. Could it be, perhaps, that smoking between 1980 and 2020 became more or less dangerous?

    It might be an uncomfortable truth for politicians and those who refuse to cut back on car journeys, but if the fall in the incidence of “smoking-related” deaths has not kept up with the fall in the incidence of smoking, it would be fairly obvious where to start investigating—the incidence of pollution exposure. I am not a medical person, but some of the smoking-related cancers listed above could seemingly be caused wholly or partly by pollution.

    None of this is meant to support tobacco smoking. On the contrary, it is meant to help us understand what the facts—rather than the myths—are surrounding “smoking-related” deaths and in this way lessen those deaths.

  • Survey Details Advocacy for Safer Nicotine

    Survey Details Advocacy for Safer Nicotine

    Image: Andrii Yalanskyi | Adobe Stock

    Knowledge-Action-Change (KAC) has released a global survey investigating the role and activities of consumer organizations advocating for access to safer nicotine products (SNPs) and tobacco harm reduction.

    Carried out by KAC’s Global State of Tobacco Harm Reduction project, the research was published in Public Health Challenges.

    It reveals that there are 54 active consumer advocacy groups working around the world to raise awareness about, and promote the availability of and access to, SNPs, which include nicotine vaping products (e-cigarettes), Swedish-style snus, nicotine pouches and heated-tobacco products.

    The authors of the survey found that the vast majority of organizations (42) were operated entirely by volunteers, most of whom had successfully quit smoking with the help of SNPs.

    Only seven of the groups had any contracted or paid staff (13 people globally), and for the last full year, the total funding for all organizations surveyed amounted to $309,810. This is in stark contrast to the millions of dollars spent on campaigns by actors, such as Bloomberg Philanthropies, seeking to limit access to SNPs, such as nicotine vaping products. The paper also notes that none of the consumer advocacy organizations reported receiving funding from tobacco or pharmaceutical companies.

    This paper starkly demonstrates the major imbalance in resources available to consumer organizations advocating for access to safer nicotine products and those opposed to tobacco harm reduction, unfairly skewing the debate.

    Many of these organizations are members of four regional umbrella organizations covering Latin America (ARDT Iberoamerica), Africa (CASA), Europe (ETHRA) and Asia-Pacific (CAPHRA).

    “This survey offered a unique opportunity to map these advocacy organizations for the first time and provide valuable insight into how they are operating all over the world,” said Tomasz Jerzynski, lead author and data scientist for the Global State of Tobacco Harm Reduction project. “The sustainability of these organizations is one of the main concerns that has come out of the data. All of these groups face challenges due to their small numbers of core workers and their dependence on volunteers.”

    “This paper starkly demonstrates the major imbalance in resources available to consumer organizations advocating for access to safer nicotine products and those opposed to tobacco harm reduction, unfairly skewing the debate,” said Gerry Stimson, report author, director of KAC and emeritus professor at Imperial College London. “It also highlights why consumer groups must be recognized as legitimate stakeholders in the policy sphere.”

  • PMI, BAT Recognized for Gender Equality

    PMI, BAT Recognized for Gender Equality

    Image: melita | Adobe Stock

    Philip Morris International and BAT were included in the 2023 Bloomberg Gender-Equality Index (GEI).

    PMI made the index for the third year running, achieving an overall score of 80.6 percent.

    “Achieving gender balance at all levels of the company is one of our top priorities, and I am delighted that our efforts are recognized again in this year’s index,” said Silke Muenster, chief diversity officer at PMI. “While we are making significant progress, we know we need to keep our foot on the acceleration pedal. An inclusive workplace that leverages the full talents of both women and men is crucial to our smoke-free vision, making our organization more innovative, resourceful and engaged.”

    In 2022, PMI achieved its target of ensuring at least 40 percent female representation in managerial roles and announced a new target to achieve 35 percent of women in senior roles by the end of 2025, among other targets.

    BAT, which participated in the index for the first time, received a score of 75 percent. BAT was recognized for creating an inclusive culture for women via its recruiting initiatives, adoption of family-friendly policies, sponsoring programs dedicated to educating women, and support of community programs. Inclusion in the index follows BAT being named as a Global Top Employer for a sixth successive year.

    “Recognition in this year’s Bloomberg Gender-Equality Index demonstrates our commitment to addressing gender diversity and highlights our concerted global efforts to provide transparent reporting,” said Hae In Kim, BAT’s director of talent, culture and inclusion. “With more than 50,000 employees worldwide, our diversity and inclusion strategy is truly global, and I continue to be incredibly proud of the collective efforts made by all our employees.”

    The GEI measures gender equality performance globally across five pillars as set by Bloomberg: leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, anti-sexual harassment policies, and external brand. The 2023 Bloomberg GEI comprises 485 companies from 45 countries and regions.

  • Trade Group: Cigar Flavor Ban Harmful

    Trade Group: Cigar Flavor Ban Harmful

    Image: pureradiancecmp

    Banning flavored cigars would do more harm than good, according to David Ozgo, president of the Cigar Association of America, reports The Center Square.

    “The economic impact is one thing, but just as important is the fact that what you’re doing is taking away an adult’s right to choose,” Ozgo said. “When President [Barack] Obama passed legislation in 2009 regulating tobacco, he stressed the idea was not to take away an adult’s right to use tobacco if that’s what they choose.”

    In 2021, flavored cigars made up 47 percent of the market, so banning them would have a huge economic impact, according to Ozgo. He projects losses of about $4 billion in retail sales, 16,000 jobs, $840 million in wages and an estimated $750 million in federal, state and local tax revenue.

    “The proposed rules would help prevent children from becoming the next generation of smokers and help adult smokers quit,” Health and Human Services Secretary Xavier Becerra said in a statement on the U.S. Food and Drug Administration’s website. “Additionally, the proposed rules represent an important step to advance health equity by significantly reducing tobacco-related health disparities.”

    Ozgo countered that it’s already illegal for a person under 21 to purchase tobacco. Government data shows less than 1 percent of youth use flavored cigars, he noted.

    “This is a solution in search of a problem,” Ozgo said. “When you look at indicators of nicotine addiction, they’re not the same as, say, cigarettes. Really, people smoke cigars for different reasons. With cigars, it’s just something you do to relax and enjoy. We always say cigars are more of a hobby than a habit; you don’t even smoke one every day.”

  • KT&G Refuses Ginseng Spinoff

    KT&G Refuses Ginseng Spinoff

    Photo: KT&G

    KT&G has refused to spin off its ginseng business as requested by activist investor Flashlight Capital Partners, reports The Korea Herald.

    “The spinoff will have little to no benefit to the company’s corporate value and shareholders from a long-term perspective,” KT&G Senior Executive Vice President Bang Kyung-man said.

    Bang expressed concern that KT&G would potentially lose “synergy” in the event of the ginseng unit’s separation.

    Flashlight Capital Partners has been putting pressure on KT&G to increase dividends and spin off its ginseng unit into a separate listing, among other things. 

    KT&G plans on initiating a share buyback program and aims to increase its overseas sales to over half by 2027. To raise the needed capital, KT&G can sell property assets and borrow from banks, according to Bang.

  • U.S. Cigarette Sales Down in 2020-2021

    U.S. Cigarette Sales Down in 2020-2021

    Photo: www.akolosov.art

    The number of cigarettes that the largest cigarette companies in the United States sold to wholesalers and retailers nationwide decreased from 203.7 billion in 2020 to 190.2 billion in 2021, according to the Federal Trade Commission’s most recent Cigarette Report. The report also states that in 2021, menthol flavored cigarettes comprised 37 percent of the market among major manufacturers, more than double the 16 percent market share they held in 1963.

    The amount spent on cigarette advertising and promotion increased from $7.84 billion in 2020 to $8.06 billion in 2021. Price discounts paid to cigarette retailers ($6.01 billion) and wholesalers ($917 million) were the two largest expenditure categories in 2021. Combined spending on price discounts accounted for 86 percent of industry spending.

    According to the Smokeless Tobacco Report, smokeless tobacco sales decreased from 126.8 million pounds in 2020 to 122 million pounds in 2021. The revenue from those sales rose from $4.82 billion in 2020 to $4.96 billion in 2021. Menthol flavored smokeless tobacco products comprised more than half of all sales and fruit flavored smokeless tobacco products comprised 2.7 percent.

    Spending on advertising and promotion by the major manufacturers of smokeless tobacco products in the U.S. increased from $567.3 million in 2020 to $575.5 million in 2021. As with cigarettes, price discounts made up the two largest spending categories, with $308.2 million paid to retailers and $81.3 million paid to wholesalers in 2021. Combined spending on price discounts represented 67.7 percent of all industry spending.

    Smokeless tobacco manufacturers also reported selling $804.8 million of nicotine lozenges or nicotine pouches in 2021, not containing tobacco, up from $422.7 million in 2020.

    The Commission has issued the Cigarette Report periodically since 1967 and the Smokeless Tobacco Report periodically since 1987.