Author: Taco Tuinstra

  • Novelties for Novel Products

    Novelties for Novel Products

    Photo: Cerulean

    Cerulean has expanded its range of next-generation nicotine product testing equipment.

    By Stefanie Rossel

    As the nicotine industry and its regulators continue to focus on novel nicotine products, it is no surprise that reduced-risk product testing receives a lot of attention in instrumentation suppliers’ R&D departments.

    “We are still in many ways ignorant of the impact of the aerosol from vapes and heated-tobacco products (HTPs) on respiratory systems, especially when the aerosols are laced with flavors that are safe for ingestion but not necessarily so when dosed to the lung,” explains Ian Tindall, head of innovation and marketing at Cerulean, a U.K.-based supplier of precision test and measurement equipment that belongs to the Coesia group. “This sort of work is needed for regulatory submissions for sure. It is also prudent to be certain that changes in formulation have no unforeseen consequences.” 

    Cerulean has been developing testing equipment for HTPs and e-cigarettes, cannabis vaping and modern oral nicotine recently. For HTPs, Cerulean has a comprehensive suite of products that is either already available or will be released this year. Tindall says Cerulean has launched a couple of new machines specifically for toxicological testing of HTPs this year. “One is a budget model—the CETI5 that produces a constant aerosol from HTPs and includes pre-activation options for HTPs plus puff control, angled use, button pressing and so on,” he says. “Unusually it uses a five-puff engine configuration, which removes the necessity for moving valves and items under test. We think of this as an entry model to the world of aerosol generation for toxicology studies.”

    “CETI” stands for Cerulean E-Cigarette Testing Instrument and is the name of a whole range of products that can be used not only to test HTPs but also to assess e-cigarettes and cannabis vape products. The CETI5’s continuous exhaust is created by synchronizing the puff engines to sequentially exhaust and generate a constant flow of aerosol—a feature highly desirable for toxicological exposure studies. Users can program a puffing routine to establish deliveries from various e-cigarette, cannabis vape and HTP devices. The angled vaping option is meant to mimic human use. In line with recommended regimes for HTPs and vape products, the CETI5’s regimes can be configured for different puff volumes, puff duration and puff interval.

    HTP Assessment

    The CETI CF, meanwhile, features a more conventional rotary-type setup with a moving valve. According to Tindall, it is considerably more sophisticated in terms of the analytical options available, including impingers and electrostatic precipitator traps as well as air-liquid interface exposure systems. “The software is more flexible with a full traceability package, which is quite important for regulatory submissions.”

    The CETI CF is a continuous-flow, five-channel vaping machine that complies with ISO20768:2018. It is designed to run as a continuous aerosol generation device through the use of the dual piston pump situated at the heart of the machine. The pump, which can pull puff volumes of 35 mL to 150 mL, switches between inlet and outlet, creating a continuous aerosol that can be delivered to any target system required. The glass construction of the dual pump and its ease of removal allows for thorough cleaning, thereby minimizing cross-contamination between runs. The CETI CF comes with a fully capable interface that is simple to use, includes security features and can be interfaced with a laboratory information management system.

    In addition to developing new machinery, Cerulean has added to its X-ray measurement a capability that looks inside sticks and measures hidden parameters by offering the facility that the company has on its Quantum Neo test station for 150 mm-long rods X-rayed as part of a suite of measurements. “We have separated this [function] out and come up with a stand-alone X-ray system in the Solo Q device,” says Tindall. “It has all the safety features you would expect as well as a user interface tablet that can be removed from the stack for easier handling.”

    Instrumentation for assessing HTPs is presently most sought after by customers, according to Tindall. “HTPs are simply the big kid on the block,” he says. “The designs are settling down—although if you look at the array of patents being published, you may argue differently. Key quality measurements seem to be those measured after the combiner has done its job. Standard equipment can mostly ensure component manufacture is correct. Hollow acetate tubes have required some different inspection that we introduced last year, but essentially, this is all pretty standard stuff. The combiner is where everything comes together, and here, any defect in construction will impact the consumer experience, so this is where innovation in test equipment is focused. The X-ray system is one example of finding a solution to investigating potential construction faults. Another is the addition of a closed-loop control to the combiner or maker.”

    A Rising Star

    The up-and-coming field in quality assurance (QA) is modern oral. “The principles look simple, but QA testing is still a bit hit-and-miss,” says Tindall. “As these pouches become more sophisticated with different contents, capsules, formats and colors, this is going to be an expanding market.”

    In early 2022, Cerulean launched Orion, the first automated test station for snus, which measures the weight, length and width and the tensile strength of the pouch seams as well as extension against load. “To date, we are very pleased with the impact Orion is making in the marketplace, and we have struggled to get enough machines directly in front of customers,” says Tindall. “One of the bizarre things for us has been [that] when we talk about testing pouched products, we get mixed responses. When we show the equipment, almost universally the interest transforms, and we end up adding a new name to the list of people wanting to trial the equipment.”

    Cerulean has further developed Orion by adding a moisture measurement station. “This was specifically designed for pouches with more than 15 percent moisture, as many of the white snus pouches have,” says Tindall. “It is quick and is part of the automation and so complements standalone systems that may be slower or more suitable for dry pouches. We have some further ideas for quality parameter checking and are developing the fundamental technologies, but these will not reach maturity for 18 months.”

    Cannabis is Cerulean’s third priority, according to Tindall, but a lack of legislative drivers and a volatile market make it difficult to effectively serve a potential customer base. “We published a suite of white papers, available on our website, with our Denver-based partner Kaycha Laboratory, which were all concerned with THC aerosol generation specifically for capture and subsequent metals analysis, as specified by the Colorado state regulators,” he says. “We showed, with Kaycha, that we needed specific conditions to get high THC content liquids into the aerosol phase, and we developed a specialist heater jacket that we made available in our catalogue that keeps the THC oil liquid warm, allowing a low viscosity for analytical experiments. We then worked with Kaycha on a capture system because electrostatic trapping simply does not work. In the end, we sourced low metal content quartz capture pads for Kaycha, and they can now effectively report the limited selection of metals in aerosol that Colorado requires.”

    The company also made improvements to its THP and cannabis testing products. “We have added the heater jacket for cannabis products, which fits on any of our smoking and vaping machines,” says Tindall. “And we have launched the CETI1, a simple single-channel vaping machine for research projects. It retains all the features of more sophisticated machines without the typical high cost.”

    Among the innovations was also an enclosure for the CETI8, an eight-channel vaping instrument, to capture any fugitive emissions. The hood covers only the operational portion of the machine, comes with several filters and allows for a complete air exchange within two minutes. According to Cerulean, the enclosure is effective at stopping unwanted odors from reaching users. Furthermore, it mitigates the ingress of contaminants to laboratory surfaces. “It came about after our portfolio manager, Helen Taylor, and I were working in a cannabis lab and realized that at the end of the day, our heads were singing from low-level exposure to cannabis aerosol,” says Tindall with a smile.

    Cerulean has two big releases planned for the fourth quarter of this year, but Tindall is quick to stress the company’s continued support for exiting equipment. “It’s always fun to talk of new products and market opportunities, but we must not forget that there is a hell of a lot of equipment still in use from years past, and we make a point of supporting the needs of those customers as well,” he says. “That is why, on top of our service team and technical support team, we are actively ensuring that equipment can be modernized through upgrades so that a machine maybe bought 10 years ago can be updated to a current specification with all that implies for the changing face of our industry.”

  • Technology Titan

    Technology Titan

    Photo: ICCPP

    Since its inception in 2014, ICCPP has had a steady focus on technology and innovation in vaping.

    TR Staff Report

    This year marks 20 years of development in the vaping industry. During this time, the industry has progressed rapidly from early basic products to today’s more technologically advanced systems alongside innovations in manufacturing and standardization. The vaping industry is expected to be valued at $24.61 billion this year. In the world of e-cigarettes, numerous companies have experienced highs and lows. Some survived; many did not. However, ICCPP Group, the parent company of Voopoo, has grown steadily in its mission to offer a “healthier and happier life” through its dedication to technological innovation.

    Today, ICCPP’s products and solutions have been marketed in more than 70 countries worldwide, covering 100,000 brick-and-mortar outlets serving over 36 million consumers. Founded in 2014, ICCPP Group has been deeply committed to scientific and technological innovation. ICCPP leadership says the foundation of its success is adhering to user-centered and talent-driven concepts. Many ICCPP products have gained popularity among consumers over the years, such as its innovative Drag system, the first instant-inhaling vaping product that changed user habits with its 0.025-second igniting speed in 2017.

    The company is also known for its Vinci series, which debuted in 2019, that represented the birth of a new product category: the Pod Mod. ICCPP is neither the largest nor the oldest company in the industry, but it is one of the most advanced. The company has grown from fewer than 50 staff members in 2014 to more than 4,000 employees in 2023. This level of success has the industry asking many questions, such as: How did ICCPP quickly grow from a small company to a key influencer? How did ICCPP become the company responsible for many of the products that influenced the future of the industry? How does ICCPP keep its products competitive?

    Always Adhering to Innovation

    Innovation is nothing new to ICCPP. “Since the day of establishment, innovation has always been the DNA of ICCPP,” explains Everest Zhao, co-founder and CEO of ICCPP Group, who has more than 10 years of experience in the vape industry. In 2014, when ICCPP was just established in China, it mainly provided technical solutions for e-cigarette companies. It then began moving forward with major investments in R&D and the creation of advanced products and vaping systems.

    In 2016, ICCPP proposed a creative solution to one of its customers. It was the predecessor of the Drag, which aimed to completely change the vaper’s habit of “igniting before using.” However, the customer did not accept the changes and insisted on a traditional solution. This incident deeply touched the founding team, according to Zhao. “It is hard for a supplier to ensure the overall quality and the user experience,” he said. “If we don’t solve the user’s pain point, don’t control the trend of technology, don’t break through the bottleneck of the industry, we can’t be seen as a company that really respects the user.”

    In 2017, ICCPP created its own brand, Voopoo. The revolutionary instant-inhaling device Drag swept the global market after its introduction. Additionally, the ignition speed of 0.025 seconds broke the industry’s speed ceiling and received wide praise from global users. The Drag series won the global sales championship for two consecutive years, which had a profound impact on the whole industry, according to Zhao.

    In 2019, ICCPP successfully developed a new product category with the first intelligent electronic atomization device, Vinci, which allowed e-liquid and nicotine salts to be utilized within one device. It successfully filled an industry gap and brought the arrival of Pod Mod, the miniaturized version of the traditional vape Mod. In addition to frequent innovations in open systems, ICCPP was also instrumental in the development of closed system products.

    In 2021, ICCPP’s replaceable product hit the market with an innovative human-computer interactive smart screen and CNC technology design. The disposable product reached the overseas sales mark of 1 million pieces in two weeks after its initial launch. Subsequently, it won not only many industry awards in Britain, the United States and other markets but also the praise of many consumers.

    From the perspective of ICCPP, the company is “a late bird” compared to its peers, according to Zhao. “Our strategy is not to compete for speed in a 500-meter race or for endurance in [a] 3,000-meter race but to compete for completion in a 10,000-meter race. No matter the investment in R&D, or reserve of talents, ICCPP is always at the forefront of the industry,” he said.

    In the early stages of ICCPP’s development, the company owned less than 40 patents. In 2020, the number of patents filed by the company exceeded 400, and in 2021, it exceeded 600. To date, the total number of patents filed by ICCPP has exceeded 2,000. The growth cannot be separated from ICCPP’s dedication to innovative employees. ICCPP Group invests no less than 10 percent of its yearly profits in R&D, according to Zhao.

    In 2019, to improve its own R&D capabilities, ICCPP cooperated with several universities to carry out research on innovative materials and set up a materials research institute, focusing on the development and application of new electronic atomization materials. To achieve a breakthrough of heating materials, ICCPP persevered through 1,000 days of research and 2,000 groups of material formulas, underwent 120 days of cyclic testing, passed more than 1,000 evaluations by global atomization enthusiasts, developed 100,000 pieces of product samples and, in 2021, developed its nano-microcrystalline ceramic core called Gene Tree.

    At the Vaper Expo U.K. 2022, ICCPP launched the industry’s first use of a ceramic core in disposable products and multi-category ceramic core solutions. At present, ICCPP has built four research institutes with more than 500 R&D staff, and the Everest Lab, which has been accredited by the China National Accreditation Service for Conformity Assessment, is becoming one of the few laboratories recognized by national authority in the electronic atomization industry.

    Pioneering ESG Strategy

    Sustainable development and corporate environmental, social and governance (ESG) strategies are becoming an increasingly important issue for the vaping industry. ICCPP plans to release its first ESG report and carbon footprint certification for three products this year. During GTNF 2022, held in Washington, D.C., ICCPP shared on stage a series of their research results in green product innovation and digital transformation. Its environmentally friendly product gained widespread attention.

    As early as 2019, ICCPP started working on environmentally friendly products, and in 2020, it launched the first disposable product made of biodegradable materials, which won a Red Dot Award in 2021. At the Vaper Expo U.K. 2023, the ICCPP ODM+ business made a technological upgrade and launched the world’s first new dual environmentally friendly disposable vape solution called the Cyclo series. It is the first combined concept of detachable parts and biodegradable materials—far ahead of the rest of the vaping industry in achieving portability and recyclability.

    Cyclo, starting from the concept of low carbon and environmental protection, considers the whole life cycle of disposables from the design, production, usage and disposal to recycling, trying its best to use biodegradable materials for the body, a unique lead-less design for assembly and a patented weld-less structure that is fully detachable so all the device’s disposable waste can be easily dismantled, according to ICCPP. This allows for direct disposal with the ability to sort and recycle, thus minimizing the harm to the environment. Many industry experts have commented that Cyclo should be the best choice to meet the environmental challenges in the vaping industry.

    Developing environmentally friendly products is just one small part of ICCPP’s ESG strategy. The company officially launched its Digital Transformation Strategy in May 2022 and became the world’s first electronic atomization enterprise to collaborate with SAP and PwC, leading the industry into the digital transformation stage.

    “In the future, we will create an unprecedented digital closed loop and a new type of digital competitiveness, getting through the complete path of digital R&D, digital manufacturing, digital marketing and so on,” said Zhao. “We will take the lead in driving corporate development through digitalization and realizing new value creation through digitalization.

    “We have always been a firm that advocates and practices within the ‘open industry’ ecology. We are willing to share our resources and achievements with the whole industry. We hope all members of the vaping industry will grow together in a healthy way. We are looking forward to working together with like-minded partners to build an open ecosystem and reshape the future of the industry.”

  • The Breakdown

    The Breakdown

    Photo: ANDS

    The vaping industry is making progress in reducing the environmental impact of single-use e-cigarettes.

    By George Gay

    The U.K. vaping industry is under notice in respect of single-use vapes. It has, according to one politician with considerable knowledge of the industry, a “window of opportunity” to defend itself against those demanding a ban on these products—a window that could slam shut at any moment.

    Pressure is building for a ban mainly on grounds of the negative environmental impact of single-use vapes, an issue that cannot be brushed aside. But, as always, those opposed to these products, and vapes in general, are muddying the waters with issues to do with illicit products, underage use and consumer safety: important issues but ones that should be dealt with separately. 

    But the good news is that disposing of used single-use vapes is possible in a reasonably environmentally friendly manner. On July 17, Waste Experts launched a report, The Challenges of Recycling Single-Use Vapes, in which it said, in part, that two products it tested, a widely available plastic and aluminium vape and a new cardboard-based entry, both demonstrated high levels of recyclability. The company, which has been operating in the environmental services sector for more than 22 years, also said that, when collected and sent to an Approved Authorized Treatment Facility, both products were able to meet the U.K. Recycling and Recovery Targets under Waste Electrical and Electronic Equipment (WEEE) regulations.

    The Waste Experts report was commissioned by ANDS, which is a leading brand owner and supplier of alternative nicotine-delivery products in the Middle East and which, as ANDS Globe U.K., is currently entering the U.K. market for single-use vapes with SLIX, a product whose outer casing of high-grade card screams recyclable.

    Indeed, in a press note introducing SLIX, which was one of the brands tested by Waste Experts, ANDS said this product was 99 percent recyclable and recoverable and that the company was on course to increase this level of recyclability and recoverability by the end of this year. As I understand it, the technology underpinning such products is advancing at speed with the elimination of wires and, importantly, with battery design improvements.

    Other brand owners also have been focusing on the environmental credentials of their products and even on the way in which used products are collected for recycling. At the same time, waste treatment companies are innovating the methods they employ in handling products, including single-use vapes, and are providing recyclability feedback loops to assist vape manufacturers and brand owners in the choice of materials and product designs that better meet their environmental aspirations.

    A Ways to Go

    Nevertheless, it would be wrong to give the impression that the vape industry has cracked the environment issue, especially in respect of single-use products. This is the final sentence of the Executive Summary of the Waste Experts report: “So whilst single-use vapes have a short lifespan and are not environmentally the best option, when collected and treated through authorized routes, the materials can be recycled and recovered correctly.”

    With some justification, those calling for a ban on single-use vapes would no doubt see this sentence as admitting that the collection and processing of used products is simply a way of treating the symptoms of the problem. I assume they would also argue that the sentence suggests that only a ban could treat the cause of the problem.

    Those promoting a ban might also look askance at the environmental claims in respect of processing used single-use vapes. The recycling and recovery categories talked about largely in respect of such products are only in third and fourth place on the five-place waste hierarchy described in the Waste Experts report: prevention (using less material and making the product last longer), reuse (reusing products with minor refurbishments or repairs), recycling (converting waste materials into new products), recovery (recovering energy through incineration, gasification or anaerobic digestion) and disposal (landfill and incineration without recovery).

    The other point that those calling for a ban are bound to pick up on is the “when collected” qualification in the Waste Energy executive summary. As I understand it, only a tiny percentage of single-use vapes are disposed of properly, with most going to landfill. This should come as no surprise, however. Apparently, many distributors and retailers of small consumer electronics are still not aware of their obligations under WEEE even though it has been in force for more than 15 years.

    Additionally, most vapers have been recruited from the ranks of smokers, and a significant number of smokers have over the years shown scant regard for the environment. Cigarette-butt litter has had a constant presence on our streets and in our waterways for decades, and no amount of appeals to consumers seem to have convinced them of the need to dispose of butts responsibly.

    Multiuse Products

    This might be overly pessimistic because there clearly are differences between cigarette butts and used single-use vapes and, in respect of the latter, it would presumably be much easier, for instance, to introduce deposit and return schemes. But I cannot help being concerned that there are few differences between cigarette and vape consumers, or between those consumers and most people, who seem to be unwilling to make modest changes to their habits even in the face of an existential climate crisis.

    Even some leading lights in the vape industry are not necessarily opposed to a ban on single-use vapes. Interviewed on BBC radio news, Doug Mutter, the chief executive of VPZ, a leading vape retailer and manufacturer of vape liquids, expressed some interesting ideas about how to address the issues surrounding single-use vapes and, in particular, explained how his company was working successfully to transition consumers from single-use to multiuse products. But elsewhere, he has been quoted as saying that he would not oppose a ban provided it did not lead to a black market—or, presumably, did not stoke the black market already in operation.

    Muddying the Debate

    This was a canny remark that, to my way of thinking, pointed up more than one issue. The first is that government austerity measures over the past 13 years have reduced the U.K.’s ability to control the influx and sale of illicit products, something that has created an unlevel playing field on which some vape companies are paying to join the producer compliance schemes required under WEEE provisions while others are not.

    But it also points up another issue: the fact that the debate about the impact of single-use vapes on the environment is constantly muddied with talk about illicit products and sales to young people, both of which are policing issues, not environment issues. Some of the stories currently doing the rounds in the media, even in those media outlets many would consider reliable, are awash with what seems to be deliberately misleading information about vaping among young people.

    Partly as a result of such stories, I assume, pressure is building behind a ban on single-use vapes by the U.K. government, and that pressure could build quickly. These are dangerous times for the industry because the ruling Conservative Party in the U.K. is struggling with its popularity ratings ahead of a general election next year; so, with vaping a minority sport, the party and government might see some electoral benefit in acquiescing to such a ban, especially since the government’s overall environmental focus has been dimmed in recent times because it seems to take the climate crisis as a long-term problem that can be addressed down the road.

    Single-use vapes are particularly vulnerable to a ban because, while they are largely the same as multiuse vapes in that they contain difficult-to-handle nicotine and batteries, their volumes, and potential volumes, make them an easy target. While those opposed to vaping in general find themselves on difficult ground when faced with the argument that vaping is providing for many people a route out of the highly risky smoking habit, they probably feel they are on firmer ground when it comes to single-use products. They might concede that vapes serve a useful purpose but question the need for single-use products, and they are unlikely to be persuaded by arguments about the latter providing a more cost-effective and convenient option for consumers than other products.

    Nevertheless, ANDS deserves credit for commissioning the Waste Experts report, which was launched at an event held in the Terrace Pavilion of the U.K.’s Houses of Parliament and was hosted by the Conservative Member of Parliament Mark Pawsey, who, as chair of the All-Party Parliamentary Group for Vaping, has been active during many years in trying to encourage a measured debate around vaping and its benefits.

    The trouble is that the vaping debate seems to have no ending. It keeps going round and round, like the London Eye ferris wheel that can be seen from the Terrace Pavilion. The Waste Experts report seems to bring closure to one part of the debate, but it is technical stuff and so not likely, in my view, to shift the needle of public opinion.

    Only one thing will shift that needle, and that is ensuring the ground is not littered with carelessly discarded single-use vapes, whatever that takes. The public is generally steeped in superficiality; it values the look of the environment over its health. And, by the way, if the aim is to include consumers in this cleanup, it would be a good idea, I think, to warn of the actual dangers posed by batteries but not to over-egg the dangers. Consumers are not going to spend much time wandering around looking for official disposal points if they have been panicked into thinking that the product in their back pocket is liable to explode or catch fire.

  • Philippines: Partnership Against Illicit Trade

    Philippines: Partnership Against Illicit Trade

    Photo: sebra

    The Philippines Bureau of Customs (BOC) has partnered with tobacco companies to help combat illicit trade in the country, reports the Philippine News Agency

    “These groups [smugglers and illicit traders] have been very creative and aggressive in entering our markets,” said Bienvenido Rubio, BOC commissioner. “Accordingly, close cooperation with tobacco companies is aimed at addressing their various modus (operandi) with even more comprehensive methods.”

    The BOC met with Philip Morris International and Philip Morris Fortune Tobacco Corp. executives. Rubio said they will work together to ensure public health safety and fair tobacco trade.

    “That has always been our goal and our mandate—to put these smugglers away and make them accountable, answerable and ultimately face the consequences of their nefarious activities,” he said.

    “It is important for us to recognize that these (schemes) are not only very real threats but well-orchestrated plans aimed at circumventing our laws,” said Verne Enciso, customs intelligence and investigation service director.

  • JT Launches ‘With 2’

    JT Launches ‘With 2’

    Image: Japan Tobacco

    Japan Tobacco has launched With 2, its new infused tobacco vapor device, under the company’s respective new brand, With. It will be sold at convenience stores and tobacco stores in Japan beginning Sept. 5, 2023, and will be available for presale online from Aug. 7, 2023.

    With 2 is the first device of the new infused tobacco brand With. It features JT’s unique infused technology, which generates vapor while an atomized liquid passes through a capsule containing granulated tobacco.

    Since tobacco vapor is generated the moment it’s inhaled, there is no delay in delivery, JT explained in a press note. There is almost no tobacco smoke smell with the product since tobacco leaves are not directly heated. The device is equipped with a dual mode that allows consumers to switch between two heating modes at the touch of a button. The high mode produces 1.3 times more vapor than the normal mode, delivering a more intense flavor experience, according to JT.

  • Former Juul Exec Loses Contamination Case

    Former Juul Exec Loses Contamination Case

    Photo: Steheap

    A former Juul Labs executive has lost a case accusing the vapor company of shipping contaminated vaping pods to retailers and firing him in retaliation for complaining, reports Reuters.

    Siddharth Breja,  a former senior vice president of global finance, sued Juul in October 2019. He alleged that the company endangered consumers by refusing to recall mint-flavored e-cigarette nicotine pods or to issue a safety warning.

    Breja said he objected to the company re-selling products that were nearly a year old without a “best by” date on their packages. He said his complaints angered his superiors and that he was fired in retaliation in March 2019.

    Juul denied all claims and sought to have the case sent to arbitration. The federal court lawsuit was put on hold pending arbitration in March 2020.

    In a joint filing on July 27, lawyers for both parties said an arbitrator had ruled against Breja and ordered him to pay certain of the company’s legal costs. They did not give further details about the decision, but asked that the lawsuit be dismissed once Breja had paid the award.

  • JT Group Reports ‘Solid’ Quarter

    JT Group Reports ‘Solid’ Quarter

    Masamichi Terabatake | Photo: JT Group

    The JT Group’s revenues increased 9.9 percent to ¥1.39 trillion ($9.17 billion) in the second quarter of 2023, up 9.9 percent over the comparable 2022 period. Core revenue at constant exchange rates increased by 6.8 percent to ¥1.3 trillion, while adjusted operating profit at constant exchange rates increased by 4.7 percent to ¥434.3 billion. On a reported basis, adjusted operating profit increased by 6.7 percent to ¥442.8 billion. Operating profit increased by 8 percent to ¥413.6 billion, and profit increased by 8.7 percent to ¥287 billion.

    “The JT Group posted another strong set of results for the first half, said JT Group President and CEO Masamichi Terabatake in a statement. “In particular, the tobacco business reported solid growth across its indicators, driven by a more resilient industry volume and continued market share gains, as well as robust pricing.

    “Considering the accelerated investment towards heated tobacco sticks (HTS) in the second half of 2023, we have kept the full year forecast for adjusted operating profit at constant FX unchanged. On a reported basis, recognizing the current positive foreign exchange trend, we have revised upward our forecast, including the adjusted operating profit. Dividend per share guidance for full year remains unchanged taking into account our dividend policy at 188 yen per share. The interim dividend is 94 yen per share.

    As announced in February, we are accelerating investment towards HTS to establish the foundation of our future growth. Ploom X is now available in six markets, following the launch in the Czech Republic in June, and will be launched in Switzerland in September. Geographical expansion is on track with the expectation to complete launches in 14 markets by the end of 2023 and 28 markets by the end of 2024.

  • Mastermind Sounds Alarm Over Illicit Trade

    Mastermind Sounds Alarm Over Illicit Trade

    Photo: Axel Bueckert

    Mastermind Tobacco has asked the government of Kenya to crack down on the illicit cigarette trade, reports The Standard.

    “We are concerned at the growing level of illicit cigarettes making their way into the country, especially from Uganda,” Mastermind said in a statement.

    “We are the biggest losers in the market because when we have 80 percent of illicit products bearing the name of our product and are sold cheaply in the country, we will not be able to compete.”

    Mastermind said it is ready to work with government agencies including Kenya’s Inter-Agency Anti-Illicit Working Group and the Anti-Counterfeit Agency, regional bodies including the East African Community and COMESA as well as international organizations such as the World Trade Organization and World Health Organization to eliminate the illicit tobacco trade.

    “If we do not work together, we may be forced to shut down because we will not be able to compete against products that are not paying tax,” Mastermind Tobacco stated.

    A recent survey by its competitor British American Tobacco found that Kenya is losing up to KES6.5 billion ($45.67 million) annually in taxes as a result of the illicit cigarettes.

    An estimated one in every five products sold in Kenya is counterfeit and almost 4 million Kenyans are using counterfeit goods that include sugar, cigarettes, bottled water and cooking oil.

    Last month, the Kenya Revenue Authority in collaboration with the Inter-Agency Team destroyed an assortment of illicit goods seized from the market worth KES500 million with an estimated tax value of KES150 million.

  • ITC Plans To Spin off Hotel Business

    ITC Plans To Spin off Hotel Business

    Timon Schneider/Wirestock

    ITC plans to spin off its hotel business, separating it from its cigarettes and food units. The company intends to retain a 40 percent stake in the new entity, with ITC shareholders holding the rest.

    At its July 24 meeting, the board noted that the ITC’s hotels business has matured and is well positioned to chart its own growth path as a separate entity in the fast-growing hospitality industry with sharper focus on the business and an optimal capital structure, while continuing to leverage ITC’s institutional strengths, brand equity and goodwill.

    According to the board, the demerger will help the new entity in attracting appropriate investors and partners whose investment strategies and risk profiles are aligned more sharply with the hospitality industry.

    Driven by strong macroeconomic fundamentals and the Indian economy’s strong growth prospects, the Indian hospitality industry is expected to witness rapid growth going forward.

    “The proposed demerger of the hotels business is testament to the company’s commitment to creating sustained value for stakeholders,” said ITC Chairman Sanjiv Puri in a statement. “Creation of a hospitality focused entity will engender the next horizon of growth and value creation by harnessing the exciting opportunities in the Indian hospitality industry.”

    ITC’s largest revenue contributor is its consumer goods business, led by cigarettes.

  • Distributors Warned Over Unauthorized Products

    Distributors Warned Over Unauthorized Products

    Photo: Ljupco Smokovski

    The U.S. Food and Drug Administration has put ABS Distribution, EC Supply and Easy Wholesale on notice for selling and/or distributing multiple unauthorized e-cigarette products. The illegal products listed in the warning letters include the popular and youth-appealing e-cigarette products Elf Bar/EB Design, Esco Bars and Puff Max.

    “FDA is committed to keeping a finger on the pulse of the rapidly evolving e-cigarette landscape, including through a variety of scientific assets equipped to quickly identify products with high youth appeal,” said FDA Center for Tobacco Products Director (CTP) Brian King in a statement. “We will continue to use this data-driven approach to inform actions across the entire supply chain, including against those who distribute illegal products between manufacturers and the point of sale.”

    Warning letters are generally the first step once an inspection reveals a violation of the law. “We will monitor to ensure these violations are corrected, and if they are not, the recipient is at risk of further actions such as civil money penalties, seizures, and injunctions,” said Ann Simoneau, director of the CTP Office of Compliance and Enforcement.