“The spinoff will have little to no benefit to the company’s corporate value and shareholders from a long-term perspective,” KT&G Senior Executive Vice President Bang Kyung-man said.
Bang expressed concern that KT&G would potentially lose “synergy” in the event of the ginseng unit’s separation.
Flashlight Capital Partners has been putting pressure on KT&G to increase dividends and spin off its ginseng unit into a separate listing, among other things.
KT&G plans on initiating a share buyback program and aims to increase its overseas sales to over half by 2027. To raise the needed capital, KT&G can sell property assets and borrow from banks, according to Bang.
Packing and pressing station for tobacco | Photo: Godioli & Bellanti
Celebrating 100 years in business, Godioli & Bellanti attributes its success to offering “quality machines at truly unbeatable prices.”
By George Gay
Lorenzo Curina | Photo: Godioli & Bellanti
After three years of subdued demand for tobacco industry primary processing equipment, interest is picking up, according to Lorenzo Curina, chief executive officer and sales director at the primary machinery designer and manufacturer Godioli & Bellanti.
There was now increasing demand for complete processing lines that were compact and uncomplicated, a demand that was being driven by a growing interest in the production of cut rag, he said in an emailed reply to questions.
At the same time, there was a trend by major cigarette manufacturers to require the relocation and/or the refurbishment of existing equipment, projects for which Godioli & Bellanti, with its 100 years of experience in the business, was well qualified to undertake. The company’s engineering skills and experience enabled it to repair, rebuild, recondition or upgrade all types of primary equipment while its organizational skills and flexibility meant it could navigate the necessary logistics involved.
In fact, an indication of the engineering and logistical skills the company can call on was demonstrated when, in 2018, it shipped and delivered what was believed to have been one of the tobacco industry’s biggest direct conditioning cylinders, which was 14 meters long, 3 meters in diameter and capable of processing flue-cured Virginia tobacco at a rate of 20 tons per hour.
A Pioneer
Godioli & Bellanti was established in 1923 by Gino Godioli and Angelo Bellanti, whose initial focus was on making agricultural implements, especially those aimed at helping the mechanization of tobacco production, since the Umbria region, where they were based, was one of the most important areas in Europe for the cultivation of flue-cured tobacco.
After the passing of the founders, Godioli & Bellanti was, in 1963, turned into a limited company, which was the beginning of a transformation. Under its new designation, Godioli & Bellanti SpA, the company moved into new and challenging areas. It developed new technologies for the tobacco industry, becoming Italy’s first supplier of tobacco machinery to the tobacco manufacturing sector, which later included the multinational companies that established operations in Italy and elsewhere in Europe.
The transformed company specialized in turnkey projects, which meant that it supplied, as well as machinery, services such as heating and lighting systems. And this breadth of operation allowed it to gain considerable expertise in machine and whole-factory design.
Initiatives such as these have been continued and are continuing. Although the company is known for its tobacco industry services, it operates in other industries, most of them natural outcrops. It offers machinery and processing lines for medicinal herbs and other plants, including mechanized equipment for the cultivation of these plants, along with machinery for drying and dehydrating; cutting, threshing and classification; and mixing and blending. It offers, too, continuous drying plants for food products.
Entering New Fields
Processing line for medical herbs | Photo: Godioli & Bellanti
Meanwhile, the company’s experience in the field of herbs was adapted to allow it to enter the field of industrial hemp processing, where its processing lines provide for the separation of the plant’s fiber, hemp, seeds, flowers, leaves and stems. This is an important and growing side of the business because the products that are generated are used in a wide range of industries, including those concerned with pharmaceuticals, textiles, foodstuffs, veterinary products and bio-building. Less well-known, perhaps, is the company’s work with tree seeds. It was the first company to develop a tree seed extraction system, and it now offers complete, custom-designed turnkey plants for the extraction and selection of tree seeds.
Aside from its interests in food and related products, the company offers biomass driers that function with recovered thermal energy, including driers for woodchips and sawdust. And it offers machines and complete processing lines for producing glass-reinforced pipes and sleeves, using continuous filament winding technology.
Custom Offerings
Drying lines for tobacco | Photo: Godioli & Bellanti
But a large part of its business is concerned with tobacco, for which it can supply equipment for auxiliary plants, threshing lines and, of course, primaries. For auxiliary plants, where the leaf tobacco process begins, Godioli & Bellanti is able to offer, among other items, conveyor belts, picking lines, feeding and blending tables, tipper feeders, tipping machines, weighing belts, vibrating conveyors, vibrating sieves, pneumatically operated pad looseners, sand reels, blending silos and ordering cylinders along with test shakers, stem testers, laboratory mills and laboratory cutters.
For many years now, it has been a goal of most leaf processors to implement changes aimed at increasing packed-tobacco quality, costs and yields, and, to this end, Godioli & Bellanti offers custom-designed threshing lines and plants, including, among a host of other equipment, high-efficiency threshers operating over a wide range of speeds and compact classifiers with low energy requirements. It provides, also, compact, high-efficiency re-driers with steam recycling systems that reduce steam consumption. Being custom designed, the re-driers provide for a wide range of adjustments in such areas as, but not limited to, drying temperatures, humidifying steam pressures and apron conveyor speeds. Finally, Godioli & Bellanti offers complete, automatic, programmable leaf tobacco packing lines for cartons, wooden boxes, zipper bags and bales.
Meanwhile, it is probably the case that the company is best known for its primary machinery and plants—particular plants at that. Curina told Tobacco Reporter that companies that contacted Godioli & Bellanti were those who preferred “traditional primary processing—I would say almost artisanal.” Such equipment includes automatic handling systems for cartons and bales, automatic de-cartoners, automatic vertical slicers, pneumatic conveying systems, weighing belts, dosing feeders, tipping feeders, blending and storage silos, toasters, sauce and flavor kitchens, casing and flavoring cylinders, drying cylinders for cut rag, and customized supervision software to render whole lines automatic.
Finally, Curina further defined his company’s approach to business. “We don’t presume to compete with the big primary machinery manufacturers for the very big projects,” he said, “but we modestly offer quality machines at truly unbeatable prices.”
This strategy seems to have paid off, not surprisingly, perhaps, given that the recent past has seen an increasing trend—at least outside China—toward shorter cigarette-manufacturing runs, a trend that has been reflected in primaries as a need to produce smaller batches of cut rag. There has been a rise, too, in the number of small, independent primary operators catering to multiple end users that need to run low-cost, highly flexible operations from small footprints. Certainly, Curina, and his brother Cesare, president of the board and technical director, who have steered the company’s direction in recent years, have made much progress—modestly expressed. A note on the company’s website describes how “Godioli & Bellanti works in several areas of the world,” before going on to list almost 60 countries and every continent.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
22nd Century Group filed a U.S. drug master file (DMF) to the U.S. Food and Drug Administration for cannabidiol (CBD) API from GVB Biopharma, a 22nd Century Group company, according to a company press release.
“GVB Biopharma is widely recognized for the quality and consistency of its Cannabinoid extracts and ingredients,” said James A. Mish, CEO of 22nd Century. “We are now leveraging these capabilities with our DMF filing to meet the increasing regulatory demands of the supplements markets.”
Additionally, 22nd Century and GVB Biopharma have entered into an agreement with Cannabinoid API Solutions (CAS) and Transo-Pharm for global sales, marketing and distribution of GVB’s Cannabinoid APIs. Transo-Pharm is a well-established supplier and distributor of pharmaceutical APIs to a broad portfolio of branded and generic finished drug product manufacturers, including more than 75 current active, ongoing development programs.
“The partnership with Transo-Pharm will accelerate opportunities to supply our APIs to the largest and most innovative pharmaceutical and consumer goods manufacturers in the world,” said Mish.
BAT has been certified as a Global Top Employer for the sixth consecutive year, according to the company.
Certification is granted by the Top Employers Institute, an independent organization that studies the employee offerings of major employers around the world.
“We are delighted to have been recognized once again as a Global Top Employer,” said Hae In Kim, director of talent, culture and inclusion at BAT. “Our people are our most important asset as we strive to build ‘A Better Tomorrow.’ The BAT ethos sets a clear direction for us to enable a diverse and inclusive workplace culture, and we are committed to attracting, developing and retaining a talented workforce by putting our people first.”
In 2023, BAT has been named as a Top Employer in a total of 37 countries across the Americas, Europe, Asia-Pacific, the Middle East and Africa. Certification this year marks the first time BAT’s U.S. subsidiary, Reynolds American Inc., has been named as a Top Employer in the United States.
Pyxus International’s wholly owned subsidiary, Pyxus Holdings, has commenced a private offer to exchange any and all of the issuer’s outstanding 10 percent senior secured first lien notes due 2024 for an equal principal amount of new 8.5 percent senior secured notes due 2027 to be issued by the issuer, according to the company.
In conjunction with the exchange offer, the issuer is soliciting consents from the holders of the existing notes to amend the indenture, dated as of Aug. 24, 2020, among the issuer, the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent, the existing notes and the related intercreditor and security documents as necessary to, among other things, eliminate most of the restrictive covenants and certain of the affirmative covenants applicable to the existing notes; eliminate the change of control repurchase obligation in the existing notes indenture and the existing notes; subordinate in right of payment the existing notes to the issuer’s existing and future senior indebtedness, including the new notes, the new term loans, the existing term loans and the ABL credit agreement; and eliminate certain events of default and release all of the collateral securing the existing notes.
Pyxus International and certain of its subsidiaries, including Pyxus Holdings, entered into a Support and Exchange Agreement with a group of creditors, including Glendon Capital Management, Monarch Alternative Capital, Nut Tree Capital Management, Intermarket Corporation and Owl Creek Asset Management, on behalf of certain funds managed by them and/or certain of their advisory clients as applicable, according to a company press release.
Pursuant to the Support Agreement, the company and its subsidiaries intend to launch comprehensive exchange transactions offered to all qualified holders of its secured debt, by which such holders will be offered the opportunity to exchange all of their secured debt at par for newly issued secured debt, maturing on Dec. 31, 2027. If consummated, the exchange transactions will result in a significant portion of the secured debt being replaced with longer dated debt.
“The company appreciates the support received from our lenders and noteholders, which demonstrates their confidence in our long-term strategy and the resilience of our business,” said Pyxus President and CEO Pieter Sikkel. “The exchange transactions will provide us with additional flexibility and extend near-term maturities to December 2027, allowing us to focus on the continued growth of our business and driving stakeholder value.”
The support agreement and the exchange transactions were recommended by a special committee of the board of directors of the company comprising a majority of the disinterested members and approved by the board of directors of the company.
Philip Morris International and the health group Medicago have severed ties after the World Health Organization rejected Medicago’s Covid-19 vaccine, according to a tobacco control body.
Covifenz, the world’s first plant-based Covid-19 vaccine, was jointly developed by Medicago, which is owned by Mitsubishi Chemical, Philip Morris and Glaxo, according to Bloomberg. The Canadian government, which provided $173 million in funding for its development, has cleared it for use.
The government of Quebec previously said it wanted to help Medicago replace its shareholder PMI with another investor so that the biotech firm can distribute its Covifenz Covid-19 vaccine internationally.
“Tobacco corporations, vaccines and governments don’t mix well, and we applaud the expulsion of Philip Morris from the Medicago collaboration,” Les Hagen, the executive director of not-for-profit organization ASH Canada, said in a statement.
Medicago’s request for an emergency-use listing was denied earlier this year by the World Health Organization because of the links with tobacco industry.
Earlier this year, Medicago announced it would cut 62 jobs at its manufacturing facility in Durham, North Carolina, USA, which played a key role in producing the company’s tobacco plant-based Covid-19 vaccine.
Altria Group has notified Cronos Group of its irrevocable abandonment of its warrant to purchase additional common shares of Cronos and all rights that it may have held in the warrant or any common shares underlying the warrant for no consideration, according to an Altria press release.
In March 2019, Altria acquired, through its subsidiaries, a 45 percent ownership interest in Cronos and the warrant. The warrant was exercisable until March 8, 2023, at an exercise price of CAD19 ($13.93) per common share. Prior to abandonment of the warrant, Altria, through its subsidiaries, owned 156,573,537 common shares of Cronos (representing approximately 41 percent of the Cronos common shares issued and outstanding) and, by fully exercising the warrant, could increase its ownership by 84,243,223 Cronos common shares to 240,816,760 Cronos common shares (representing approximately 52 percent of the Cronos common shares that would be issued and outstanding following full exercise of the warrant).
The closing share price of Cronos common shares on Dec. 15, 2022, was CAD3.81, and the Cronos common shares have not traded above CAD6 over the past 12 months. Given the Cronos trading levels and the March 2023 expiry of the warrant, Altria elected to abandon the warrant on Dec. 16, 2022. As a result of the warrant abandonment, Altria expects to claim a capital loss of $483 million on its U.S. federal consolidated income tax return for 2022. Altria continues to own 156,573,537 common shares of Cronos.
Altria, through its subsidiaries, holds the Cronos common shares for investment purposes. Altria will continue to evaluate Cronos’ business and prospects and all other factors it deems relevant in determining whether it or its affiliates will acquire additional common shares of Cronos or dispose of common shares of Cronos in the open market, in privately negotiated transactions (which may be with Cronos or with third parties) or otherwise.
Tobacco companies will have to start displaying signs with “corrective” statements about the health effects and addictive nature of cigarettes at U.S. points of sale in the second half of 2023, according to the Department of Justice (DOJ), reports Fox News. A court order requiring the statements will take effect July 1, 2023, after which tobacco companies will have three months to start posting the statements for 21 months in English and Spanish.
The order “resolves the government’s long-running civil racketeering lawsuit against the largest United States cigarette companies,” according to the DOJ. The racketeering lawsuit was filed in 1999 and ended in 2005; however, the DOJ said the new court order is the last of several corrective remedies related to that case.
Altria Group, Philip Morris USA, R.J. Reynolds Tobacco Co. and four cigarette brands owned by ITG Brands are subject to the order. An estimated 200,000 of 300,000 retail stores in the U.S. that sell cigarettes have agreements with the tobacco companies. The order requires the companies to amend their agreements, requiring corrective statements to be placed at the stores on color signs that are eye-catching. Messaging will include adverse health effects of smoking, the addictive nature of nicotine and adverse health effects of secondhand smoke, among others.
“Justice Department attorneys have worked diligently for over 20 years to hold accountable the tobacco companies that defrauded consumers about the health risks of smoking,” said Associate Attorney General Vanita Gupta. “Today’s resolution implements the last remedy of this litigation to ensure that consumers know the true dangers of the smoking products they may consider purchasing.”
“This is an important moment in the history of cancer control in the United States,” said William Klein, associate director of the National Cancer Institute’s behavioral research program. “Smoking causes about 30 percent of all cancer deaths in the United States, and therefore, the court-ordered corrective statements appearing at the point of cigarette sale will help support our mission to reduce the burden of cancer. We are grateful to our colleagues at the Department of Justice for having completed this significant work.”
Philip Morris International plans to take Swedish Match off of the stock market now that it owns a large enough share of the company to initiate a compulsory redemption of remaining shares, according to Reuters.
“We are delighted to have obtained over 90 percent ownership of Swedish Match, allowing us to initiate a minority redemption process to acquire the remaining shares outstanding and request the delisting of the company from the stock market,” said PMI CEO Jacek Olczak in a statement.
“This transaction marks a major milestone in accelerating our shared objective of a smoke-free future. We look forward to welcoming Swedish Match’s employees and leading oral nicotine portfolio into the PMI family to create a global smoke-free champion, notably bringing IQOS and Zyn together in both the U.S. and international markets.
“We are very excited about the growth, value creation and progress in tobacco harm reduction that we believe can be achieved together over the coming years. Despite the increased cost of financing over recent months, we expect the combination to be low single-digit accretive to PMI’s adjusted diluted EPS in 2023, before potential revenue synergies and excluding transaction-related and one-off costs and the amortization of acquired intangibles.”
In May, PMI submitted a $16 billion takeover bid for Swedish Match. The bid initially received pushback from Elliott Management, Framtiden and other stakeholders as they felt that it undervalued the company. PMI later raised its bid from SKK106 ($10.21) per share to SKK116 per share. Elliott Management, Framtiden and the other shareholders agreed to tender their shares after the bid was raised, and PMI secured over 83 percent approval by the end of the initial offer period.
