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Category: Business & Finance

  • Greenbutts Partners with H.I.E. Handelsgesellschaft

    Greenbutts Partners with H.I.E. Handelsgesellschaft

    Image: pickup

    Greenbutts, a science-driven leader in biodegradable filter technology, has entered into a strategic agreement with H.I.E. Handelsgesellschaft mbH effective Sept. 15, 2023, according to a press release. H.I.E. Handelsgesellschaft mbH is appointed as Greenbutts’ exclusive distributor for Poland in the European Union.

    Tadas Lisauskas, CEO of Greenbutts, said, “We are confident that our partnership with H.I.E. Handelsgesellschaft mbH will provide Greenbutts customers in Poland with an outstanding quality and exceptional customer service. We seek to achieve strong supply chains by providing them with Greenbutts biodegradable filter rods and filter substrate, offering an expanded range of innovative filter material and local stock for quicker deliveries.”

    Marc Sohns, managing director of H.I.E., added that “As the industry is facing transition by single-use plastic legislation and strengthening environmental commitments in the European Union, we are very pleased to partner with Greenbutts to offer our customers a certified biodegradable filter solution. We will ramp up our supply chain of sustainable substrate in 2024 for our clients in Poland and be in a position to provide them supply and support for the Greenbutts material. The Greenbutts partnership will continue to expand the H.I.E. product offerings to supply the materials that our customers need to be successful.”

  • Kaival Brands Earns Initial Royalties from Philip Morris

    Kaival Brands Earns Initial Royalties from Philip Morris

    Image: ariya j

    Kaival Brands Innovations Group, parent to Bidi Vapor, received its first royalty payments from Philip Morris International for marketing Bidi Vapor products in multiple countries.

    In a press release, Kaival Brands announced that PMI achieved a record level of monthly sales in July for its Bidi products that are marketed by PMI under the names VEEBA and VEEV NOW.

    Eric Mosser, CEO and president of Kaival Brands, said he was pleased to see the positive trajectory of sales and royalties to the company.

    “We are proud to work with Philip Morris and remain steadfast in our commitment to the responsible commercialization of better alternatives to cigarettes for adults who would otherwise continue smoking,” he said.

  • BAT to Invest Further in Bangladesh

    BAT to Invest Further in Bangladesh

    Image: Rumana

    BAT Bangladesh plans to invest BDT1.5 billion ($13.6 million) in its Savar factory site in order to scale up productivity to meet growing demand, according to The Business Post.

    The board of directors approved the decision at its Sept. 24 board meeting.

    The investment will be generated from internal sources and bank financing based on the company’s cash flow, according to the Dhaka Stock Exchange disclosure.

    BAT Bangladesh is constructing a bonded warehouse for storage of wrapping material, leaf and finished goods, according to the disclosure. The company also invested in the electrical, fire detection and protection systems, air conditioning and ventilation systems, IT systems and security systems as well as construction of site ancillary facilities for employee well-being and factory services, the construction of a reinforced cement concrete road and creation of an underground drainage system.

    Earlier this year, the company invested in the Savar factory to create contingency capacity and take advantage of upcoming export opportunities.

    BAT Bangladesh is headquartered in Dhaka and has cigarette factories in Dhaka and Savar, a green leaf threshing plant in Kushtia and a green leaf re-drying plant in Manikganj.

  • PMI Considering Selling Stake in Vectura

    PMI Considering Selling Stake in Vectura

    Image: Denys Rudyi

    Philip Morris International is considering selling a stake in Vectura, according to Reuters.

    PMI is looking to bring on a partner to help operate and grow Vectura’s drug manufacturing outsourcing business, according to company statements to the Wall Street Journal. PMI could possibly sell a majority or a minority stake. Other options are a licensing or royalties deal or a commercial partnership.

    In 2021, PMI bought Vectura for $1.36 billion as part of the company’s long-term plan to transition to a “broader healthcare and wellness” company. PMI also acquired Fertin Pharma and OtiTopic in the same year.

    “We aim to accelerate Vectura’s growth and will be exploring potential partnerships to enhance its contract development and manufacturing organization business,” Chief Financial Officer Emmanuel Babeau said in July, noting that the company remained committed to developing the wellness healthcare segment.

  • BAT Sells Russian Business

    BAT Sells Russian Business

    Image: Tobacco Reporter archive

    BAT has formally entered into an agreement to sell its Russian and Belarusian businesses.

    The buyer is a consortium led by members of BAT Russia’s management team, which, upon completion, will wholly own both businesses. Post completion, these businesses will be known as the ITMS Group.

    “Throughout the transfer process, one of BAT’s key priorities has been the interests of its colleagues in Russia and Belarus,” BAT wrote in a statement. “As part of the agreement, their employment terms will remain comparable to their existing BAT terms for at least two years post-completion.”

    BAT anticipates that the transaction will complete within the next month once certain conditions have been satisfied. Upon completion, BAT will no longer have a presence in Russia or Belarus and will receive no financial gain from ongoing sales in these markets.

    BAT remains confident of delivering its full-year guidance as set out at its half-year results on July 26, 2023.

    BAT’s operations in Russia include a head office in Moscow, 75 regional offices and a manufacturing facility in St. Petersburg. BAT also has an office in Belarus.

    On June 30, 2023, on a constant currency basis, Russia and Belarus accounted for approximately 2.7 percent of group revenue and approximately 2.5 percent of group adjusted profit from operations.

    BAT’s decision to sell its Russian business is a response to Moscow’s military invasion of Ukraine.

  • 22nd Evaluates Alternatives for Tobacco Assets

    22nd Evaluates Alternatives for Tobacco Assets

    Photo: 22nd Century

    22nd Century Group has initiated a process to evaluate strategic alternatives with respect to the company’s tobacco assets. The process will include consideration of a range of strategic, operational and financial transactions and alternatives, such as business combinations, asset sales, licensing agreements, alternate financing strategies and other options.

    “We believe the current market capitalization of the company does not appropriately reflect the value of our assets or their long-term potential. After extensive discussion, our board has determined that the best way to maximize value for shareholders is to comprehensively evaluate the company’s strategic alternatives,” said Nora Sullivan, chair of the board of 22nd Century, in a statement.

    “Through the strategic alternatives process, we hope to identify ways to monetize the value or more effectively expand the market reach of our tobacco portfolio, including our innovative VLN tobacco harm reduction products, the first and only combustible tobacco product to receive a modified-risk tobacco product designation from the U.S. Food and Drug Administration.”

    The company has engaged TD Cowen as advisors in its review of strategic alternatives. There is no assurance that the strategic alternatives process will result in the approval or completion of any specific transaction or outcome.

    The company has not established a timeline for completion of the review process and does not intend to disclose developments unless and until its board of directors approves a specific transaction, concludes the review or determines that further disclosure is appropriate or is required.

  • Innokin Partners with Bahrain Duty Free

    Innokin Partners with Bahrain Duty Free

    Image: Tobacco Reporter archive

    Innokin is partnering with Bahrain Duty Free (BDF), a retailer in the Middle East.

    BDF will help introduce Innokin’s Innobar vaping products to Bahrain Duty Free’s premium stores, catering to the increasing demand for e-cigarettes in the region, according to a press release.

    The new partnership began with a pilot project launched in April 2023. Within two weeks, the entirety of the trial stock had sold out.

    “Building on this remarkable success, the collaboration has now expanded to provide customers with greater access to Innokin’s award-winning vaping solutions,” Innokin wrote in its announcement. “Innokin’s Innobar devices, in particular, have garnered significant interest for their exceptional performance and flavors, which are tailored to suit the preferences of the Bahrain market.”

    Currently, the Innobar 3500, 6000 and V7000 models are available at BDF locations. A key element of the partnership has been the knowledge-sharing and training provided by Innokin’s experts to the management of BDF.

    “We are thrilled about our partnership with Bahrain Duty Free. This collaboration signifies not only our dedication to the growing Middle East market but also our commitment to fostering responsible practices in the industry,” said George Xia, co-founder of Innokin. “With our decade-plus experience and the shared values of both organizations, we are confident that this partnership will set new standards of excellence for vaping.”

  • Juul to Restructure and Reduce Employees

    Juul to Restructure and Reduce Employees

    Image: Andrii Yalanskyi

    Juul Labs has announced a company restructuring aimed at reducing operating costs and positioning the company to continue to advance its mission during a period of regulatory and marketplace uncertainty.

    According to a press release, the principal aim of this restructuring is to enable the company to maximize profitability and cash-flow generation while continuing to invest in its core priorities, which include delivery of high-quality products to its commercial partners, ongoing development of next-generation products, engagement with the U.S. Food and Drug Administration regarding Juul’s pending and possible future market authorization applications, and commercial growth consistent with compliance with all applicable laws and regulations.

    With these operating cost reductions, Juul Labs says it is positioned to increase its adjusted EBITDA margins and generate meaningful free cash flow before litigation settlements. In doing so, the company will reduce its need to access capital pre-premarket tobacco product application, extend its time horizon to continue its pursuit of market orders from the FDA and generate positive equity value as the company pays down liabilities over time.

    Juul says it remains fundamentally optimistic about the prospects for Juul Labs Inc.—“a view rooted in our belief that our technology and our pipeline of new innovations represent the most valuable ever brought forward to transition adult smokers away from cigarettes while combating underage use,” the company wrote on its website.

  • Kaival Amends Philip Morris Deal

    Kaival Amends Philip Morris Deal

    Credit: More

    Kaival Brands International (KBI) has amended its agreement with Philip Morris Products, a wholly owned affiliate of Philip Morris International, for the development and distribution of electronic nicotine-delivery system products in markets outside of the U.S.

    Eric Mosser, CEO of Kaival Brands, the exclusive distributor of all products manufactured by Bidi Vapor, said in a press note that with more than a year of operational history for KBI and given the recent changes to regulations in international markets, it became clear that there were a number of opportunities to improve the terms of the original licensing agreement with PMI and reduce the burden of administering it.

    “We are extremely pleased to reach an agreement that shall enable us to achieve our objectives. The revised licensing agreement simplifies the payment structure resulting in cost savings of approximately $2.7 million for the company over the lifetime of the license agreement,” said Mosser. “It also enables better predictability and forecasting for KBI and streamlines data reporting. Finally, we anticipate that the acceleration of royalty payments will be a net positive to our financial performance over the duration of the agreement.”

    Under the terms of the amended agreement, the parties agreed to revise certain terms, which provide for, among other things, a fixed pricing structure with volume-driven increases and a recapture of nonrecurring engineering costs by KBI.

    Accordingly, Kaival Brands expects a reconciliation payment of approximately $135,000. It projects approximately $300,000 in additional royalties to be earned through the end of 2023.

  • 22nd Century Signs New Distribution Agreement

    22nd Century Signs New Distribution Agreement

    Image: Tobacco Reporter archive

    22nd Century Group has entered into a new distribution agreement with Hub, a key Midwest-based convenience store and multi-channel distributor with warehouses located in Missouri and Kansas.

    22nd Century’s VLN products are now available for purchase by eligible Hub customers as a part of 22nd Century Group’s state and regional rollout program.

    “Hub is a critical conduit to a growing list of regional, independent and tribal retail outlets in the Midwest and a highly regarded wholesale tobacco products distributor with more than 60 years in its served markets,” stated John Miller, president of tobacco products for 22nd Century Group, in a statement.

    “By adding distribution to Hub’s extensive customer list, 22nd Century can expand retail points of sale in both existing and new served markets for its innovative VLN reduced-nicotine content cigarettes, the first and only combustible cigarette to secure a modified-risk tobacco product authorization from the U.S. Food and Drug Administration. Our VLN brand contains 95 percent less nicotine than contained in U.S. conventional cigarettes. As demonstrated by leading independent scientists, reducing the nicotine level in cigarettes has the potential to substantially reduce the enormous burden of smoking-related death and disease.”

    Hub runs warehouse operations in St. Louis, Missouri; Kansas City, Missouri; and Galena, Kansas, serving as a multi-channel industry-leading cigarette, tobacco and comprehensive distributor of tobacco-related products. Hub is a leading distributor of cigarettes in the Midwest, providing a comprehensive catalog of tobacco and tobacco-related products to more than 2,500 customer locations in Illinois, Kentucky, Iowa, Missouri, Kansas, Oklahoma and Arkansas. Hub customers include regional, independent and tribal accounts across its served market that sell tobacco products.