Author: Taco Tuinstra

Top KT&G Shareholder Opposes CEO Nominee

Photo: zzzdim
KT&G’s biggest shareholder is opposing the nomination of Bang Kyung-man as the cigarette manufacturer’s new CEO, reports Yonhap News. The Industrial Bank of Korea (IBK), which owns about 8 percent of KT&G, cited falling profitability and dubious business practices during the nominee’s tenure as a board member.
On Feb. 22, KT&G’s CEO candidate recommendation committee selected Kyung-man Bang, senior executive vice president of KT&G, as the final CEO candidate, citing his performance on criteria such as management expertise, global acumen, strategic thinking skills, stakeholder communications and universal morality and ethical awareness.
KT&G shareholders are due to vote on the nomination during the company’s annual general meeting on March 28. The appointment would mark KT&G’s first leadership change in nine years.
IBK opposes Bang’s nomination because “KT&G’s operating profit has fallen more than 20 percent” since he was appointed as vice president of the cigarette maker, an IBK official was quoted as saying.
“Given a decision to secure friendly shares using its own stocks, the independence and fairness of the current board of directors are bound to be seriously questioned,” the official said.
In a regulatory filing dated March 12, IBK also made a shareholder proposal to improve KT&G’s governance by strengthening the expertise and independence of the board of directors.
KT&G has faced pressure recently to be more transparent in its CEO selection process. In a video published ahead of the South Korean tobacco firm’s annual general meeting, KT&G shareholder Flashlight Capital Partners highlighted what it considered the problems during previous CEO nominations.
In January, the incumbent CEO, Baek Bok-in, said he would not seek reappointment.
March 14, 2024
Kazakhstan Mulls Cigar Tax

Photo: Maksym Kapliuk
Kazakhstan’s Ministry of National Economy wants to introduce excise taxes on high-end cigars and other luxury items, reports The Times of Central Asia.
The goals of the new taxes are “to equalize the socioeconomic situation of different segments of the population, to increase the nation’s revenue and to regulate consumption of certain goods,” according to the ministry.
In its proposals, the ministry acknowledged that potential reductions in consumption of the impacted luxury goods, along with the cost of administrating the new taxes, might offset any additional income generated.
The new amendments are also forecast to harmonize excise on general tobacco. Current legislation already provides for a gradual increase in excise taxes on cigarettes, which are due to reach $30.6 1,000 cigarettes this year.
The ministry’s document is publicly available for discussion until March 27, with the new tax code expected to be adopted in October of this year.
March 14, 2024
Call for Climate-Proof Agriculture in Zimbabwe

Photo: Taco Tuinstra
Smallholder farmers, who are the backbone of Zimbabwe’s tobacco farming industry, should have access to affordable irrigation facilities, according to the Minister of Lands, Agriculture, Fisheries, Water and Rural Resettlement Anxious Masuka.
This years tobacco growing season was impacted by an El Nino-induced drought, which caused leaf volumes to be 10 percent below those of last year’s record 296 million kg.
“We must take innovative ways to climate-proof agriculture,” Masuka was quoted as saying at the opening of the marketing season by The Star. “Seventy-five percent of our tobacco is grown by the smallholder sector who invariably depend on the rains to plant their tobacco.”
The start of the tobacco marketing season is an important event in Zimbabwe’s farming calendar, as tobacco is the country’s largest agricultural export.
Tobacco exports earned Zimbabwe nearly $1 billion in 2023, according to the Tobacco Industry Marketing Board.
This year the first bale of the golden leaf was auctioned for $4.92 per kg compared to $4.35 last year.
March 14, 2024
IQOS Iluma i Debuts in Japan

Photo: Ned Snowman
Philip Morris International has launched IQOS Iluma i, the latest and most innovative addition to its growing portfolio of smoke-free products, in Japan. The launch marks the 10-year anniversary of IQOS, which debuted in Nagoya, Japan, in 2014.
“We leverage science, world leading brands and commercial capabilities to provide better alternatives to our consumers. This anniversary provides an opportunity to renew our smoke-free vision and our ambition for over two-thirds of our total net revenue to come from smoke-free products by 2030,” said PMI CEO Jacek Olczak in a statement.
“IQOS Iluma disrupted the category by introducing induction-heating technology that heats tobacco from within, to provide a consistent taste experience, no tobacco residue, and no need to clean the device. Today, we take IQOS to new heights, with the launch of IQOS Iluma i—the latest innovation in our smoke-free portfolio, offering a range of advanced features for a clean, seamless, and more flexible experience.”
The IQOS Iluma i series offers three devices in Japan: IQOS Iluma i PRIME, IQOS Iluma i and IQOS Iluma i ONE. All three devices bring a range of adaptable new features.
The new touch screen on the device’s holder allows users to see experience-relevant information quickly and easily. To personalize the experience, IQOS Iluma i introduces a new pause mode. By swiping up or down on the touch screen, users can pause and resume their consumption according to their preferences.
The new IQOS Iluma i also includes smart features that help prolong the lifespan of the holder’s battery. Furthermore, the door for IQOS Iluma i is made from aluminum produced with renewable energy and the inner textile layer of IQOS Iluma i’s Prime leather-like wrap is made of 100 percent recycled plastic.
“IQOS Iluma i is our most innovative offering to date and the new flagship in our portfolio of scientifically substantiated, heat-not-burn smoke-free systems,” said Bertrand Bonvin, president heat-not-burn platforms at PMI. “Like previous IQOS devices, it emits, on average, 95 percent lower levels of harmful chemicals compared with cigarettes. We are proud that consumer feedback continuously fuels our innovation, and IQOS Iluma i is a testament to that.”
March 13, 2024
Zimbabwe Crop Down 10 Percent

Photo: Taco Tuinstra
An El Nino-induced drought has slashed volumes but raised farmers’ hopes for strong pricing.
Zimbabwe’s tobacco volume is likely to be at least 10 percent below last year’s record 296 million kg due to drought, reports Reuters.
The growing season was impacted by El Nino, a natural climate phenomenon in which the surface waters of the central and eastern Pacific Ocean become unusually warm, causing changes in global weather patterns.
At 113,000 hectares, the tobacco growing area this season was 3 percent smaller than that of last year. Yields per hectare were down, as well.
Following an ambitious land reform in the 2000s, Zimbabwean tobacco production is dominated by smallholder farmers who lack irrigation systems.
Zimbabwe’s two licensed Harare auction floors, which handle approximately 5 percent of the country’s tobacco crop, are scheduled to open tomorrow. Deliveries for the far-larger contract sales will commence on Friday.
Contract tobacco sales will be conducted not only in Harare, but also at approved decentralized selling centers in the countryside. These were set up during Covid-19 to minimize travel but proved so successful that they were maintained after the pandemic receded.
March 13, 2024
ITC Shares Jump on BAT Sale

Timon Schneider/Wirestock
ITC’s share price jumped more than 8 percent on March 13 after British American Tobacco sold a $2 billion stake in the Indian conglomerate, reports Reuters.
The share price had initially fallen in the wake of BAT’s original announcement, as investors were uncertain of the transaction’s conditions.
The sale of 436.9 million shares, representing about 3.5 percent of ITC’s outstanding shares, still leaves BAT with a stake of more than 25 percent in the company.
Cigarettes are ITC’s largest business, accounting for more than 40 percent of its revenue. The company has been working to consolidate its business, with plans to spin off its hotel business.
BAT said it intends to use the net proceeds to buy back BAT shares over a period ending December 2025, starting with £700 million in 2024. “This will enable the allocation of operating cashflow to fund investment in our transformation, continue to deleverage towards our new target range of 2-2.5x adjusted net debt/adjusted EBITDA, while also maintaining a progressive dividend and supporting a sustainable share buyback,” the company wrote on its website.
March 13, 2024
Consumer Group Says No to PMTA Registries

U.S. states must recognize the unintended consequences of passing laws requiring premarket tobacco product application (PMTA) registries for alternative nicotine products such as vaping devices, heaters, and nicotine pouches, according to the Consumer Choice Center, an organization claiming to represent consumers in more than 100 countries.
In the first months of 2024, more than a dozen bills have been introduced in U.S. states calling for a state-based registry for alternative nicotine products. Such legislation has already been passed in Oklahoma, Louisiana and Alabama.
“While the intention behind these bills is to manage consumer access to unregulated nicotine products on the illicit market, the reality is that the FDA is not approving enough new devices and products to create a competitive, regulated marketplace that meets consumer demand,” said Elizabeth Hicks, U.S. affairs analyst at the Consumer Choice Center.
While 26 million nicotine alternative products submitted PMTAs to the Food and Drug Administration, only 23 have been approved. Of those 23 approved products, 12 are tobacco-flavored e-liquid refills.
“The FDA is hiding the ball here on product approvals and how few new products are actually coming to market. If the goal is to improve public health across the country, then consumers deserve to choose from a variety of different nicotine alternatives,” said Hicks.
The Consumer Choice Centers urges state legislatures to refrain from adding to counterproductive federal policies and instead advance tobacco harm reduction through a competitive marketplace.
March 12, 2024
Okman Joins Filtrona as Commercial Director

Lutfu Okman (Photo courtesy of Filtrona)
Filtrona has appointed Lutfu Okman as its new global commercial director.
Okman brings with him over 25 years of commercial leadership experience, including senior management roles with multinational companies in the textiles, chemical and manufacturing industries.
He succeeds Hywel Thomas, who has announced his retirement after 10 years with the company.
“We are really pleased to welcome Lutfu to the Filtrona family,” said Filtrona CEO Robert Pye in a statement. “His proven track record of strategic commercial growth and wealth of experience make him an ideal fit for the role, and he is primed to drive our ambitious growth strategy. Lutfu plays a pivotal role in shaping Filtrona’s commercial endeavors and fostering sustainable long-term growth.”
“I am thrilled to join Filtrona at such an exciting time in its journey, particularly during the 100-year anniversary of the company’s first patented filter,” said Okman. “I look forward to collaborating with the talented and passionate Filtrona team to drive our commercial strategy, deliver exceptional value to our customers, and contribute to the company’s continued growth.”
Pye also expressed his gratitude for Thomas’ dedication and contributions to Filtrona. “Hywel’s leadership, strategic vision, and sharp business acumen have been invaluable to Filtrona, helping to make us the successful and dynamic global business that we are today. We sincerely thank Hywel and wish him the very best in his well-earned retirement.”
March 12, 2024
TIMB Licenses 32 Contractors

Photo: Taco Tuinstra
Zimbabwe’s Tobacco Industry and Marketing Board (TIMB) has licensed 32 contractors to buy leaf this season, reports The Herald.
The country’s tobacco auctions will open March 13, with the contract floors starting operations a day later.
To date, the regulator has licensed only two auction floors—the Tobacco Sales Floors and Premier Tobacco Auction Floor.
Contract sales will be conducted in Harare and at decentralized selling centers in Karoi, Mvurwi, Bindura, Marondera and Rusape.
TIMB Head of Operations Blessing Dhokotera reiterated that tobacco farmers would retain 75 percent of their proceeds in U.S. dollars and the remainder in local currency.
He also highlighted measures against child labor, side marketing and the spread of infectious diseases such as Covid-19 and cholera.
Zimbabwe’s tobacco production has suffered from drought this years, with officials predicting a harvest of 265 million kg this year, compared with 294 million kg in 2023, according to News Day.
The droughts are attributed to the El Nino climate phenomenon which involves a periodic warming of ocean temperatures in the central and eastern Pacific Ocean, near the equator, and can have significant impacts on weather patterns worldwide.
March 11, 2024
BAT Inaugurates Innovation Center

Photo: BAT
Included in British American Tobacco’s new innovation center at Southampton, U.K., is a nicotine-pouch pilot plant that allows its researchers to go from concept to trial product in an hour. The investment in the pilot plant is presumably an indication of the confidence the company has in nicotine pouches, which sit comfortably alongside nicotine replacement therapy products on the continuum of risk and that are perhaps the most environment friendly of all the lower-risk products being used to assist smokers move away from cigarettes.
Officially opened on March 7 in the presence of BAT’s entire management board, the new center is housed within BAT’s research and development facility, which has been in operation since 1956 on a site occupied by the company for more than 100 years.
In a press note, BAT said the £30 million ($38.56 million) investment would support its mission to become a predominantly smokeless business in which 50 percent of its revenue was derived from non-combustibles by 2035.
The center provides nine specially designed technical spaces to aid the development of BAT’s portfolio of new category products. “These spaces are dedicated to research for modern oral nicotine pouches, for liquids and flavor for vapor products, for heated tobacco products, and for well-being and stimulation beyond nicotine,” the press note said. “The investment will also support work on packaging, engineering, innovation development and system integration…
“The new facilities will bring together cross-functional and key R&D teams—with 400 highly specialized scientists and engineers, drawn from a range of fields including biotechnology and clinical trials. These teams will accelerate the development of the next generation of BAT’s new category products and provide the robust evidence necessary to encourage adult smokers to switch to less risky alternatives, backed by science.’
James Murphy, director, research and science at BAT, said, “The opening of this new facility marks an important milestone in BAT’s transformation and will play a key role in making a smokeless future a reality.”
Meanwhile, BAT said it had more than 1,600 specialists spread across the U.K., the U.S., Brazil, Indonesia, Malaysia and China. “The £30 million investment in the Southampton facility follows the opening of BAT’s innovation centers in Trieste, Italy, in 2021 and in Shenzhen, China, in 2022, and an investment of £300 million a year in R&D to develop new category products and establish substantiation of their reduced risk potential,” the company said.
March 10, 2024