Category: News This Week

Factory managers from all of Imperial Tobacco’s production sites worldwide recently gathered at Santander in Spain. This was the first time that such a gathering had taken place.

“The event was an opportunity to celebrate achievements in the last 12 months, and awards were handed to those factories with outstanding results in safety, quality and reliability,” according to a note posted on the Imperial website.

During the event, Chief Executive Alison Cooper shared her insights into the business, while group manufacturing, research and development director, Walter Prinz, and his management team outlined the key challenges for the year ahead.

The event, which provided participants with an opportunity to visit Imperial’s cigar factory in Cantabria, was attended also by other guests, including Fernando Dominguez, director premium cigar.

Jacques Bouende, lead factory manager for West and Central Africa, said that the event had been “a great way to get to know those doing the same role and build up our network of contacts around the world.”

Japan’s 2014 leaf tobacco crop will be grown on 8,964 ha, down by 2.7 percent on the area under tobacco this year, 9,245 ha, which was down by 1.4 percent on that of 2012.

The flue-cured production area, at 5,805 ha, will be down by 98 ha or 1.7 percent; the burley production area, at 3,135 ha, will be down by 144 ha or 4.4 percent; and the domestic variety production area, at 24 ha, will be down by 3 ha or 11.1 percent.

The Leaf Tobacco Deliberative Council announced last week its annual determinations for local tobacco cultivation areas and grower prices for 2014 in response to a proposal submitted by Japan Tobacco Inc.

The council comprises no more than 11 members appointed by JT with the approval of the minister of finance from among representatives of leaf tobacco growers and academics.

The council was said to have been in general agreement with JT’s proposal.

The average grower price for all types will be set at ¥1,906.47 per kg for the 2014 crop.

This was the same price that was set for this year’s crop, which itself was increased only by 0.84 percent on that of the previous year.

Including the results of its international tobacco business and its nontobacco businesses, JT’s April–September revenue, announced on Oct. 31, increased by 9.6 percent to ¥1,159.1 billion.

Operating profit was up by 30.8 percent to ¥347.4 billion, and the profit attributable to the owners of the parent increased by 40.5 percent to ¥237.1 billion.

The day before the announcement of its first-half consolidated results, JTI said that it was cutting its domestic workforce by about 1,600 people, and closing factories, sales offices and its vending machine division.

Tobacco control advocates in Southeast Asia are calling for tougher rules to ban cigarette-company contributions and sponsorships, according to a story in The Philippine Star.

The director of the Southeast Asian Tobacco Control Alliance, Bunon Ritthiphakdee, said tobacco companies were making sponsorship a part of their corporate social responsibility (CSR) programs so as to skirt around laws and policies banning such activities.

“These CSRs are nothing more than disguised marketing campaigns, and should therefore be exposed and stopped,” she said in a statement.

“If we understand the agenda behind tobacco industry CSRs, we can also be more effective in monitoring and regulating such activities under the global tobacco treaty, the WHO Framework Convention on Tobacco Control.

“National and regional measures are needed to make the public aware that the tobacco industry’s CSR activities are as toxic as cigarette smoke,” she added.

Ritthiphakdee said that among the countries of the region, only the Philippines, Thailand and Vietnam had legislative measures in place to ban CSR activities and/or the publishing of CSR activities.

The Philippines’ education department, she claimed, had issued a circular to restrict interaction of officials with the tobacco industry and that included a prohibition on the tobacco industry contributing funds.

Thailand, through a Cabinet decision, had banned both donations by tobacco companies to government agencies and the publishing of CSR activities.

And a tobacco control law passed in Vietnam last year had banned tobacco-industry CSR activities related to culture and sport, she added.

R.J. Reynolds Tobacco Co says that it has transformed its non-corporate website intended to inform adult tobacco consumers, retailers and wholesalers about tobacco tax issues.

The site, www.transformtobacco.com, has added a new e-mail alert feature that allows individuals to sign up to receive electronic notifications anytime an alert is issued for their state.

“This new feature will make it much easier for people to stay informed and take action on tobacco-related issues that affect them,” said Bryan Hatchell, director of communications.

“We are continuously searching for ways to transform the tobacco industry and making it easier for people’s voices to be heard will certainly help achieve that goal.”

Transformtobacco.com is mobile device friendly. It has an interactive state-by-state map with key information, links to social media channels (www.facebook.com/transformtobacco and www.twitter.com/transformtob), and fully-updated content on tobacco issues.

Visitors to the site can quickly connect with their legislators via a toll-free call or e-mail (determined by ZIP code) following the steps for ‘ongoing relationship-building with elected officials’.

The managers of Reynolds American Inc. and its operating companies are due to discuss the companies’ performance and plans during presentations to the investment community on Nov. 18.

The presentations will be webcast in listen-only mode at www.reynoldsamerican.com from about 9 a.m. Eastern Time.

Registration is available under Events & Presentations at the Investors section of the above website.

A replay of the webcast will be available on the website.

The Jakarta city administration is to target students and low-income residents in a new anti-smoking campaign funded by cigarette tax revenue, according to a story in The Jakarta Post.

Starting from next year, the city is expected to receive about IDR400 billion (US$35.2 million) a year in revenue from cigarette excise tax.

“We are currently discussing and fleshing out the anti-smoking programs, which comprise not only curative but also preventive measures,” the head of the Jakarta Health Agency, Dien Emmawati, was quoted as saying.

“Most smokers in the capital are low-income residents so we will focus on educating them. We will also target students.”

Dien said the funds allocated for anti-smoking programs would be distinct from those allocated for financing the city’s health care program, which this year amounted to IDR1.2 trillion.

Levels of tobacco use by young people in the UAE were described as shocking on Monday after a new study had found that more than one in five boys aged 13 to 15 was a smoker, according to a story in The National.

The teenage smoking problem was being blamed on the availability of cheap cigarettes and inadequate education about the health risks associated with the habit.

“We know that youth smoking is at a high rate and smoking among the young is on the increase,” said Wedad Al Maidoor, head of the tobacco control committee at the Ministry of Health.

“The use is high but the good thing is we are acting on this. The sale to teenagers is very highly controlled and marketing of tobacco is not allowed any more.

“Smoke-free areas are increasing and increasing across the UAE. We are making progress.”

A World Health Organisation study found that in the UAE 21.3 percent of boys and 9 percent of girls aged 13 to 15 used tobacco, and it found that most preferred cigarettes to other products, such as shisha or dokha.

The study found also that, among adults, 28 percent of men and 2.4 percent of women smoked.

The Ministry of Health and Welfare says that women in their 20s and men in their 30s are the least health-conscious Koreans, according to a story in the Korea Joongang Daily.

The ministry’s concerns were based on the results of a national health survey.

It is thought that young women and men smoke and drink at a rate that might be linked to stress, their jobs and Korea’s corporate culture.

In Korea’s hierarchical corporate culture, young employees are expected to heed senior workers’ insistence on drinking at office get-togethers.

The findings were part of the 2013 national health survey conducted jointly by the Health Ministry and the Korea Centers for Disease Control and Prevention.

The survey polled people of all ages within 3,840 households.

Imperial Tobacco’s stick-equivalent volume sales during the year to the end of September, at 317 billion, were down by 7 percent on those of the year to the end of September 2012. Stick-equivalent sales include sales of cigarettes, and those of fine-cut, cigars and snus converted to cigarette-stick equivalents.

Meanwhile, the company reported that its stick-equivalent Growth-Brand volumes were down by 2 percent to 129 billion.

“Our growth brands account for a significant amount of our volume and revenue generation, and our aim is to increase this over time to further enhance the quality and sustainability of our business,” Imperial reported.

“These brands outperformed the market in the year, with volumes down less than the rate of market declines.

“Seven of our 10 growth brands grew share and on an aggregate basis, we grew the share of growth brands from 5.1 to 5.4 percent and increased net revenue by 2 percent.

“Growth brands now account for 41 percent of our total volumes, up from 39 percent last year, and 39 percent of tobacco net revenues, up from 38 percent last year.”

Imperial said, too, that while it was strengthening the sustainability of its core tobacco business, it was also pursuing opportunities for growth in other areas through its new standalone subsidiary, Fontem Ventures.

“Fontem Ventures has initially been focused on our entry into the fast growing e-vapour sector and will be launching its own products in 2014,” the company said.

“Fontem Ventures has also acquired further e-vapour assets and expertise from Dragonite International, a company founded by one of the pioneers of e-cigarette technologies, which has further enhanced our sector potential.”

Imperial’s tobacco revenue during the year to the end of September, at £20,881 millon, was down from £21,161 million during the year to the end of September 2012. Net revenue was up from £7,005 million to £7,007 million.

Operating profit from tobacco was up from £1,447 million to £1,888 million, while adjusted operating profit was up from £2,989 million to £3,003 million.

“Our focus on driving quality growth and transitioning the business has delivered another year of earnings growth and further strengthened our sustainability,” said Chief Executive Alison Cooper.

“Market conditions remain tough. We remain focused on maximizing our long-term growth potential, and in 2014 our priority is to continue transitioning the business: increasing investment behind our key brands and markets to drive quality growth, delivering our cost optimization program and implementing our stock optimization program.

“A reasonable working assumption for 2014 therefore is modest growth in earnings per share at constant currency, with another strong dividend increase of at least 10 percent.

“Our actions in 2013 and over the coming year will provide us with a strong platform for growth in 2015 and beyond.”