Category: News This Week

SWM Reports Full-Year Financial Results

Photo: SWM
Schweitzer-Mauduit International (SWM) reported sales of $1.07 billion in 2020, up 5 percent from 2019. GAAP operating profit was $128.8 million, or 12 percent of sales, down 4 percent. Adjusted operating profit was $171.6 million, or 16 percent of sales, up 8 percent.
“We are very proud of the performance of our business in a year marked by volatility and uncertainty,” said SWM CEO Jeff Kramer. “We delivered another year of adjusted EPS [earnings per share] growth to $3.68, over $128 million of free cash flow, and exited the year with strong organic sales momentum in AMS [advanced materials and structures].”
In the engineered papers segment, SWM reported sales of $530.9 million in 2020, down 3 percent from 2019, with immaterial currency impacts.
A volume decline of 3 percent was partially offset by positive price/mix performance of 1 percent. Price/mix benefited from a higher mix of high-value cigarette, heat-not-burn, and battery separator papers and a smaller proportion of lower margin nontobacco volumes compared to the prior year period. The 2020 volume decline was driven primarily by the continued strategic deemphasis of lower margin nontobacco volumes while tobacco-related papers declined modestly, in line with industry attrition.
GAAP operating profit was $116.8 million, down 2 percent, and included the $16.2 million of restructuring and site closure expenses. During the third quarter, SWM reached an agreement with a large customer to shift production of papers purchased from the company’s Spotswood, New Jersey, USA, site—which exclusively served this customer—to other SWM facilities. As part of the transition, SWM worked collaboratively with the customer to co-develop a new production technology to better meet the customer’s needs, and SWM and the customer signed a new multi-year supply agreement.
SWM shut down the Spotswood facility during the fourth quarter, and for full-year 2020 incurred $11.7 million of restructuring and related site closure costs, which are excluded from adjusted financial metrics.
February 19, 2021
Jack Bowles: 2021 pivotal year for BAT

Jack Bowles (Photo: BAT)
Speaking at the Feb. 18 Consumer Analyst Group of New York (CAGNY) conference, British American Tobacco (BAT) CEO Jack Bowles shared his growth plans and ambitions for the next phase in the company’s transformation.
With strong new category momentum and a clear pathway to 2025 profitability, Bowles called 2021 a “pivotal year” for BAT, announcing an ambitious program called QUEST to accelerate the company’s transformation to create the “enterprise of the future.”
QUEST stands for “Quantum,” Unleashing innovation, Empowering the organization, Shaping sustainability and Technology and digital. The program aims to propel the continued evolution of BAT’s portfolio, structure, culture and ways of working.
According to Bowles, BAT’s goal is to build “A Better Tomorrow” by reducing the health impact of its business. Central to its strategy are the company’s reduced-risk products. These include vapor, tobacco-heating products and modern oral products. Following the January launch of its new CBD vaping line in a test market in Manchester, BAT now also offers products that go beyond nicotine.
In December 2020, BAT announced it had progressed its Covid-19 vaccine candidate into human trials—a significant milestone that further demonstrates the company’s commitment to innovation and science.
BAT has 13.5 million consumers of its noncombustible products, a growth of 3 million in 2020. As BAT works toward its aim of achieving 50 million consumers of noncombustible products by 2030, the company will continue to target its offering in high-growth future areas, including the beyond nicotine on-the-go well-being and stimulation space.
“We are at a key moment in our transformation,” said Bowles in a statement. “We are accelerating our transformation toward ‘A Better Tomorrow’ and committed to building ‘The Enterprise of the Future.’”
“We have made great progress. We have invested in strong foundations for the future. We are building and driving new capabilities, with a clear focus on digital and the sharpening of our science and innovation pipeline. And we have done this while consistently delivering financial returns.
“Our strategy, growth and investment priorities are building BAT into a sustainable, leading consumer-centric, multi-category consumer products company of the future. Our transformation is moving us from a company that is known for tobacco to one that is focused on technology and innovation.
“Our clear roadmap for the future is leveraging our strengths, new capabilities, innovation portfolio and brands with purpose to build ‘A Better Tomorrow.’”
February 19, 2021
KT&G Recognized in Morgan Stanley Index
KT&G received an AA rating in Morgan Stanley Capital International’s (MSCI) environment, social and government (ESG) index evaluation—one level higher than it received last year and the highest score for a Korean company.
Every year, MSCI classifies more than 8,500 listed companies worldwide by industry. The investment information provider evaluates management status related to the environment, social responsibility and corporate governance to assign ratings ranging from AAA to CCC.
Among the 11 tobacco companies evaluated this year, KT&G took first place for responsible marketing and excellent quality management within the “Product Safety and Quality” category.
In the “Governance” category, KT&G received high marks for newly established items such as “business ethics” and “tax transparency.” The company’s board of directors was rated best in the industry in terms of its diversity and expertise.
“The evaluation result this year is meaningful in that KT&G’s ESG management has been recognized worldwide and that the company is now classified into the ESG Leader group,” a KT&G spokesperson said in a statement. “We will continue to strive for the sustainable development of the company based on our advanced governance.”
KT&G was also honored with the “Grand Prize” of the corporate governance evaluation conducted by the Korea Corporate Governance Service in 2019 in recognition of its sustainability management system.
February 19, 2021
Union Urges Equal Treatment of Growers

Photo: Taco Tuinstra
The Tobacco Farmers Union (TFU) has urged the government of Zimbabwe to make contracting companies treat small-scale farmers as equal partners in the production process, reports Newsday.
The union said farmers’ interest in growing tobacco had decreased because contractors were claiming the lion’s share of earnings realized from the sale of the crop.
Zimbabwe is one of the world’s biggest tobacco exporters, having produced 190 million kg last year, earning farmers about $748 million.
But official statistics indicate that farmers paid back $400 million to contracting companies, leaving them with only $350 million.
“Tobacco contract farming in Zimbabwe does not benefit the ordinary farmer,” the TFU said in a statement ahead of the start of this year’s marketing season.
The season is expected to kick off next month if regulators are convinced that World Health Organization protocols on controlling Covid-19 are adhered to, according to Tobacco Industry Marketing Board CEO Andrew Matibiri.
February 18, 2021
Germany: New Vapor Tax Proposed

Photo: Theerapan Bhumirat | Dreamstime.com
The German government has proposed a new tax for nicotine-containing vapor products, which would be effective in summer 2022.
The new tax is “a response to current market developments.” It would include a tax of €0.02 ($0.02) per mg of nicotine for e-liquids, effective July 1, 2022. Beginning Jan. 1, 2024, the tax would double by the end of 2026.
“This is appropriate for reasons of fair taxation since only nicotine-containing substances in e-cigarettes are to be regarded as substitutes for cigarettes,” the draft of the proposed Tobacco Tax Modernization Act states. Authorities are also justifying the decision based on the “existing risk potential” of vapor products compared to traditional tobacco products.
“They are not harmless consumer products and can cause serious illnesses,” the draft bill states.
Lawmakers expect the new tax to bring in €135 million in 2022 and up to €2.9 billion by 2026.
The German Alliance for Tobacco-free Pleasure (BfTG) says the plan “makes no sense.”
“The tax would make smoking cheaper than vaping and make e-liquids many times more expensive,” BfTG chairman Dustin Dahlmann told ECigIntelligence, warning that it could lead to a flourishing black market and a collapsing legal industry, such as in Italy and Estonia. The BfTG believes taxation should be left at the EU level.
Currently, vapor products are not specially taxed. They are subject to the 19 percent value-added tax, however.
A decision is expected by the end of 2021.
February 18, 2021
Altria Reaffirms Full-Year Guidance

Photo: Altria
Altria Group has reaffirmed its guidance for 2021 full-year adjusted diluted earnings per share (EPS) to be in a range of $4.49 to $4.62, representing a growth rate of 3 percent to 6 percent from an adjusted diluted EPS base of $4.36 in 2020.
Speaking at the virtual Consumer Analyst Group of New York Conference on Feb. 17, CEO Billy Gifford, and CFO Sal Mancuso discussed how Altria is “moving beyond smoking,” advancing its 10-year vision and continuing to focus on environmental, social and governance (ESG) initiatives to create long-term shareholder value through sustainability.
“The pursuit of our vision is about sustainability and businesses that are aligned with the responsibility expectations of our stakeholders,” said Gifford. “We have an unmatched portfolio of noncombustible products in the U.S. market today that we’re rapidly expanding, we’re investing in research and development on innovative noncombustible products and we believe we can continue to deliver significant value for our shareholders while moving beyond smoking.”
In its presentation, Altria announced its new corporate responsibility focus areas and shared examples of its continued ESG leadership. Altria published the first in a series of corporate responsibility progress reports: Engage and Lead Responsibly. This report details Altria’s new 2025 corporate responsibility goals.
February 18, 2021
Post Office to Publish ENDS Mailing Rules
Photo: F. Muhammad from Pixabay
The United States Postal Service (USPS) is scheduled to publish in the Federal Register its rules for mailing electronic nicotine-delivery system (ENDS) products tomorrow, Feb. 19. The unpublished rule states that the prohibition on mailing ENDS will apply immediately “on and after” the date of the final rule.
However, the Preventing Online Sales of E-Cigarettes to Children Act, which placed ENDS under the PACT Act, was enacted on Dec. 27, 2020, and becomes effective 90 days after enactment (March 27, 2021).
Under the USPO rule, the agency will mail vapor products under narrowly defined circumstances:
Noncontiguous States: intrastate shipments within Alaska or Hawaii
Business/Regulatory Purposes: shipments transmitted between verified and authorized tobacco industry businesses for business purposes, or between such businesses and federal or state agencies for regulatory purposes
Certain Individuals: lightweight shipments mailed between adult individuals, limited to 10 per 30-day period
Consumer Testing: limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes
Public Health: limited shipments by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
Azim Chowdhury
The unpublished rules suggest that business-to-business shipments will be allowed. According to Azim Chowdhury, a partner at Keller and Heckman, the PACT Act has historically exempted business-to-business deliveries from the USPS ban. Specifically, the USPS ban does not extend to tobacco products mailed only for business purposes between legally operating businesses that have all applicable state and federal government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation or research.
“Companies seeking to use USPS for business-to-business deliveries must first submit an application to the USPS Pricing and Classification Service Center and comply with several other shipping, labeling and delivery requirements,” said Chowdhury.
The USPS rules also state that the listed exceptions cannot feasibly be applied to inbound or outbound international mail, mail to or from the Freely Associated States, or mail presented at overseas Army Post Office, Fleet Post Office, or Diplomatic Post Office locations and destined to addresses in the United States. Because of this inability, all ENDS products “in such mail are nonmailable, without exception.”
In addition to the nonmailing provisions, the PACT Act requires anyone who sells cigarettes or smokeless tobacco to register with the Bureau for Alcohol, Tobacco and Firearms and the tobacco tax administrators of the states into which a shipment is made or in which an advertisement or offer is disseminated, according to Chowdhury. Retailers who ship cigarettes or smokeless tobacco to consumers are further required to label packages as containing tobacco, verify the age and identity of the customer at purchase, use a delivery method (other than the USPS) that checks ID and obtains an adult customer signature at delivery, and maintain records of delivery sales for a period of four years after the date of sale, among other things.
February 18, 2021
Nveed Chaudhary Joins Broughton Nicotine Services

Nveed Chaudhary (Photo: BNS)
Broughton Nicotine Services has appointed Nveed Chaudhary as chief regulatory officer.
This appointment is the latest in a series of high-profile additions to the team at the contract research organization specializing in electronic nicotine-delivery systems (ENDS) as it embarks on its next phase of growth.
Having built a leading reputation for advancing a smoke-free future by helping ENDS companies bring noncombustible products to market, the business is now also moving into modern oral nicotine products, heated-tobacco products and cannabidiol products.
“We are absolutely delighted to have brought Nveed on board,” said Paul Moran, CEO of Broughton Nicotine Services. “He is one of a small number of experts in the industry to have developed scientific and regulatory strategies that have delivered the highly sought-after marketing order for both premarket tobacco product applications (PMTA) and modified-risk tobacco product (MRTP) applications. Nveed’s depth of knowledge and experience will further help Broughton’s clients shape the future of next-generation nicotine products.”
Previously head of harm reduction science at Imperial Brands and director of strategic communications at Philip Morris International, Chaudhary was a core team member of the successful IQOS PMTA and MRTP regulatory submissions and director for the Myblu PMTA submission program. He is a recognized expert in the nicotine sector, author of over 25 peer-reviewed publications and speaker at international lung disease and tobacco harm reduction conferences.
“My career goal has always been to reduce the burden that lung disease has on patients, society and public health,” said Chaudhary. “To combat the harm effects caused by smoking, it’s important to offer consumers high quality, rigorously tested and regulated noncombustible products.
“Broughton Nicotine Services acts as the bridge between the industry and global regulators. By applying experience and knowledge, we partner with manufacturers to help them secure marketing orders for safer next-generation products.
“It’s clear that the business shares my drive to accelerate the creation of a smoke-free future, and I’m excited to be part of the team.”
February 18, 2021
Davidoff Appoints Chief Commercial Officer

Photo: Jakub Jirsák | Dreamstime
Luc Hyvernat will be Oettinger Davidoff’s next senior vice president and chief commercial officer effective March 1, reports Halfwheel.
Hyvernat succeeds Jim Young, who left the company last month after nearly a decade with Davidoff. Hyvernat is currently the international director for Centre Vinicole Champagne Nicolas Feuillatte. He has more than 20 years of experience in the tobacco industry, working for Altadis, Imperial Brands and SEITA.
“With his longstanding track record of international leadership roles and extensive experience in the tobacco industry, I am convinced that Luc Hyvernat will make a significant contribution to accelerate the commercial growth of our company,” said Beat Hauenstein, CEO of Oettinger Davidoff. “Together with the regional business leaders, Luc Hyvernat will further enhance our company’s commercial transformation to remain the best-in-class organization for our trade partners and consumers.”
February 18, 2021
Philippines Declares War on Smuggling

Photo: Mykhailo Polenok – Dreamstime.com
The Philippines’ Bureau of Customs (BOC) has declared an all-out war against cigarette smuggling, reports The Manila Times. Cigarettes top the bureau’s list of most smuggled products.
In 2020, the BOC seized PHP5.77 billion ($119.138 million) worth of illicit cigarettes—more than half of the PHP10.63 billion worth of smuggled goods intercepted by the bureau in 2020. The agency recorded 997 seizures from January 2020 to December 2020. Of the number, 204 seizure cases were for smuggled cigarettes and tobacco products.
Commissioner Rey Leonardo Guerrero tapped the Customs Intelligence and Investigation Service (CIIS) to take the lead for the anti-smuggling effort in cooperation with the Enforcement Security Service, the National Bureau of Investigation and the Philippine Coast Guard.
Guerrero’s directive came in the wake of a series of interceptions of more than PHP100 million worth of smuggled cigarettes made by operatives of the Manila Container Port-CIIS during the first two months of the year.
Deputy Commissioner for Intelligence Group Raniel Ramiro disclosed that the latest interception comprised 820 master cases of Astro brand cigarettes with a street value of PHP30 million. In January and in early February, the CIIS operatives also seized PHP70 million worth of illegal cigarettes and other goods following a raid in three separate storage facilities in Paco, Manila, Las Pinas City and Pasay City.
February 17, 2021