Category: Business

Dubai Businessman Buys Mostar Tobacco Factory

Photo: Freesurf
Jassim Abdullah Ibrahim Alhuwai is buying the Mostar Tobacco Factory in Bosnia and Herzegovina after making the best offer at public sale, reports the Sarajevo Times.
Alhuwai will pay BAM6 million ($3.4 million) for the factory. He has already paid BAM10,000 as a deposit and has been given a deadline of April 22 to pay the remainder.
“I hope that the investor from Dubai will pay the money by the appointed deadline and that our agony will end, that there will be the bridging of our service periods and that some money will be paid to us,” former Mostar worker Aida Kajtaz said.
This was not the first attempt to sell the factory. Previously, Mirsad Rahimic, a Swiss entrepreneur and Mostar native, attempted to buy the factory, but there were a number of complications that arose during the purchase process.
Production at the factory ended in 2007, but workers campaigned to restart manufacturing.
Mostar Tobacco Factory complex has an estimated value of BAM21 million, but due to lawsuits and debts, the Mostar Municipal Court declared that the complex should have been sold for BAM3 million.
March 24, 2022
BAT in Talks to Transfer Russian Business

Photo: scaliger
BAT is in advanced talks to transfer its Russian business to Russia’s SNS Group of Companies after Moscow suggested it could nationalize assets of foreign firms that left the country, reports Reuters.
BAT controls just under 25 percent of the Russian tobacco market.
“The process of transferring the management of BAT business in Russia to SNS GC is well underway at remarkable speed,” said an SNS spokesperson.
BAT declined to comment but said last week that it was looking for parties interested in the transfer of the Russian business. Kingsley Wheaton, BAT’s chief marketing officer, stated that BAT’s distributor could be interested in a transfer, adding that exiting the business or stopping sales or manufacturing would be seen as a criminal bankruptcy by Russia and BAT would face legal consequences.
The level of production and the supply and distribution chain will be maintained with a transfer, according to the SNS spokesperson. Whether BAT will pull out completely or continue to supply SNS with raw materials or manufacturing support is unclear.
March 21, 2022
Imperial Negotiates Transfer Russian Assets

Photo: Casimirokt | Dreamstime.com
Imperial Brands has begun negotiations with a local third party about a transfer of its Russian assets and operations.
“We believe that, in the current circumstances, an orderly transfer of our business as a going concern would be in the best interests of our Russian colleagues,” the company wrote in a press release. “We employ 1,000 people in Russia in our sales and marketing operations and in our factory in Volgograd—and their safety and well-being is our key priority in this process. We will also continue to pay their salaries until any transfer is concluded.
“Meanwhile, we are also supporting our Ukrainian colleagues and their families, including with transport and accommodation to enable them to escape the areas most severely hit by conflict as well as [with] resettlement assistance for those who have left Ukraine.
“We have evaluated the financial impact of an exit from Russia and the previously announced suspension of operations in Ukraine on our full-year guidance for FY22. We now expect full-year constant currency net revenue growth of around 0 [percent] to 1 percent. While there will be some ongoing costs related to the suspension in Ukraine, we expect a relatively small impact on our constant currency adjusted operating profit, reflecting the limited profit contribution of the two markets. In FY21, Russia and Ukraine represented in total around 2 percent of net revenues and 0.5 percent of adjusted operating profit. Any transaction relating to our Russian business is subject to agreement being reached.”
March 15, 2022
Shenzhen Locks Down Due to HK Covid Surge

Photo: niromaks
China’s health authorities have locked down Shenzhen to prevent the spread of Covid-19 from Hong Kong, which is experiencing a surge of the virus.
Shenzhen is a significant manufacturer of consumer electronics, including vapor hardware, for the global market. The city houses tech powerhouses, such as iPhone manufacturer Foxconn, and more than 170,000 vaping-related businesses. The local vapor industry employs more than 3 million people and supplies more than 90 percent of the vapor hardware used around the world, according to some estimates.
The Shenzhen lockdown will last for at least seven days. All nonessential workers must stay home, adults must take PCR tests and public transportation is being halted.
A lockdown in Shenzhen might further disrupt global supply chains because Shenzhen has one of the world’s largest ports. An outbreak in Shenzhen in late spring of last year held up port operations and caused a steep spike in global shipping rates that helped drive up prices for imported goods in the United States and elsewhere.
According to The New York Times, Hong Kong has reported nearly 3,780 Covid-19 deaths and nearly 700,000 new cases since late January. Shenzhen reported 66 new cases in a population of 17 million on Sunday.
March 14, 2022
BAT Withdraws from Russia

Photo: Anton Gvozdikov
BAT is withdrawing from Russia, the company announced on its website.
“Building on our announcement of 9th March 2022, we have now completed the review of our presence in Russia. The context is highly complex, exceptionally fast-moving and volatile,” the company said in a statement, referring to the Russian military invasion of Ukraine.
“We have concluded that BAT’s ownership of the business in Russia is no longer sustainable in the current environment,” the company wrote.
“Today, we have initiated the process to rapidly transfer our Russian business in full compliance with international and local laws. Beyond continuing to pay our 2,500 employees, we will do our utmost to safeguard their future employment.
“Upon completion, BAT will no longer have a presence in Russia.
“Following our decision today, and in light of the continuing uncertainty related to Ukraine and Russia and the possible indirect impact on the rest of the group, we consider it prudent to revise our guidance for full-year 2022. We now expect constant currency group revenue growth of 2 percent to 4 percent and mid-single figure constant currency adjusted diluted EPS [earnings per share] growth. In 2021, Ukraine and Russia accounted for 3 percent of group revenue and a slightly lower proportion of adjusted profit from operations.”
BAT faced heavy criticism for an earlier decision to continue operating in Russia. “If you are a member of the board of British American Tobacco, courting popularity was probably never a top personal priority. Even so, the people overseeing a large and widely held FTSE-100 company might still feel obliged to explain why, amid the broad boycott of Russia by multinationals, they think its fine to carry on business in the country roughly as normal,” wrote Nils Pratley in The Guardian.
Earlier, Philip Morris International, Japan Tobacco International and Imperial Brands announced the suspension of their operations in Russia.
March 11, 2022
Firms Scale Back in Russia and Ukraine

Photo: BAT
The leading tobacco companies are adjusting their strategies in Russia and Ukraine following the war between those countries.
Philip Morris International announced the suspension of its planned investments in the Russian Federation, including all new product launches and commercial, innovation and manufacturing investment. PMI has also activated plans to scale down its manufacturing operations amid ongoing supply chain disruptions and the evolving regulatory environment.
“We have watched with shock the war in Ukraine and condemn the violence in the strongest possible terms. We stand in solidarity with the innocent men, women and children who are suffering,” said PMI CEO Jacek Olczak in a statement. “We join the many voices calling for an immediate end to the war and the restoration of peace.”
Olczak said PMI had helped evacuate more than 800 people from the most impacted areas; provided critical aid to employees who remain in Ukraine; and provided those who have left the country with logistical, medical, financial and other practical support in neighboring countries. PMI is continuing to pay salaries to all its Ukrainian employees during this period, the company said.
Ukraine accounted for around 2 percent of PMI’s total cigarette and heated-tobacco unit shipment volume and under 2 percent of PMI’s total net revenues in 2021. The company has one factory and approximately 1,300 employees in the country.
In 2021, Russia accounted for almost 10 percent of PMI’s total cigarette and heated-tobacco unit shipment volume and around 6 percent of PMI’s total net revenues. The company employs more than 3,200 people in the country.
BAT, which employs more than 1,000 people in Ukraine and around 2,500 people in Russia, said it had suspended all business and manufacturing operations in Ukraine and suspended all planned capital investment into Russia.
“In Ukraine, we have suspended all business and manufacturing operations and are providing all the support and assistance we can to our colleagues, including relocation and temporary accommodation. Our businesses bordering Ukraine are providing assistance to the humanitarian relief effort,” the company wrote on its website.
“In Russia, we have a full establishment of our people right across the country, including substantial local manufacturing. Our business in Russia continues to operate. As a key principle, we have a duty of care to all our employees at this extremely complicated and uncertain time for them and their families.”
Japan Tobacco International, which has four factories and nearly 4,000 employees in Russia, announced the suspension of all new investments and marketing activities as well as the planned launch of its Ploom X heated-tobacco product in Russia, citing the unprecedented challenges of operating in Russia at this time. “Unless the operating environment and geopolitical situation improve significantly, JTI cannot exclude the possibility of a suspension of its manufacturing operations in the country,” the company wrote in a press statement.
Imperial Brands also suspended all operations in Russia, halting production at its factory in Volgograd and ceasing all sales and marketing activity.
“We have already suspended our operations in Ukraine in order to prioritize the safety and well-being of our 600 employees in that country,” the company wrote in a statement.
Russia and Ukraine are relatively small markets for Imperial Brands, representing around 2 percent of net revenues and 0.5 percent of adjusted operating profit in 2021.
March 10, 2022
Bantam Vape Exempted from Shipping Ban

Photo: Bantam Vape
The U.S. Postal Service (USPS) has granted Bantam Vape an exception from its ban on shipping vapor products. Bantam Vape will be allowed to ship its e-liquid products to select vape retailers and distributors throughout the United States.
The postal service’s decision comes in response to Bantam’s application for a business purposes exception to the Prevent All Cigarette Trafficking (PACT) Act, which was amended by Congress on Dec. 27, 2020, prohibiting the shipment of e-cigarettes and vapor products through the USPS.
“Bantam’s ability to reengage USPS as a shipper of our high-quality, flavor-filled e-liquids allows us to more effectively serve our trusted retail and distribution partners,” said Bantam spokesperson Anthony Dillon. “Utilizing USPS as an alternative shipping channel provides our business-to-business customers with increased purchase order flexibility and decreased shipping timelines and costs.”
Bantam provided the USPS with the necessary documentation to obtain its exception to the PACT Act prohibition against shipment of vapor products through the USPS. This included submission of applicable state and federal permits and licenses for both Bantam and its customers named in the application.
“We thank USPS for processing our application in a timely manner and in helping us deliver alternatives to combustible cigarettes to our customers across the U.S.,” said Dillon. “As we continue to grow our brand’s customer base, Bantam is committed to adding retailers and distributors to the list of those we can ship to using USPS.”
March 8, 2022

Stora Enso Suspends Operations in Russia

Stora Enso will stop all production and sales in Russia until further notice due to the ongoing invasion in Ukraine. Stora Enso has three corrugated packaging plants and two wood products sawmills in Russia, employing around 1,100 people. The company will also stop all export and import to and from Russia. A mitigation plan has been activated to secure availability of input materials from other sources.

“The war in Ukraine is unacceptable, and we are fully behind all sanctions. We will now focus all our attention on supporting our customers and the well-being of our employees,” said Annica Bresky, president and CEO of Stora Enso, in a statement.

Stora Enso’s sales in Russia are approximately 3 percent of total group revenues. The impact on Stora Enso’s sales and earnings before interest and taxes is not material.

March 2, 2022

PMI Suspends Operations in Ukraine

Philip Morris International is suspending operations in Ukraine, including its factory in Kharkiv, following the invasion of Russian forces into the country, according to The Wall Street Journal.
“The safety and security of our colleagues and their families is our primary concern, and we have, therefore, temporarily suspended our operations in Ukraine,” said PMI CEO Jacek Olczak. “Our employees are advised to stay at home or in any safe place and follow instructions from local authorities.”
PMI has more than 1,300 employees in Ukraine. The country accounted for about 2 percent of PMI’s total cigarette and heated-tobacco shipment volume in 2021.
PMI has stated that it has contingency plans in place to restart operations once conditions are safe.
February 25, 2022
Turning Point Brands Reflects on Strong 2021

Yavor Efremov (Photo: TPB)
Turning Point Brands (TPB) announced financial results for the fourth quarter and full year ended Dec. 31, 2021.
Net sales were comparable with the fourth quarter of 2020 at $105.3 million despite a 22 percent decline in sales of new-generation (“NewGen”) products.
Gross profit decreased 3.8 percent to $50.3 million compared to the fourth quarter of 2020. Net income decreased 20.3 percent to $11.5 million. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 7.6 percent to $23.8 million.
Full-year 2021 net sales increased 10 percent to $445.5 million. Gross profit increased 14.7 percent to $217.8 million. Net income increased 36.3 percent to $52.1 million. Adjusted EBITDA increased 19.8 percent to $108.1 million.
“Our fourth-quarter results capped off another strong year of performance for Turning Point Brands, with EBITDA growing 20 percent for the fiscal year. Sales for the fourth quarter finished above our previous guidance and in line with the previous year despite a 22 percent decline in NewGen sales, which fell within our previous guidance,” said TPB President and CEO Yavor Efremov, in a statement.
“Zig-Zag delivered another quarter of double-digit growth against a tough comparable period while Stoker’s reaccelerated to high single-digit growth driven by mid-teens growth in the moist snuff tobacco business. Additionally, NewGen managed through a challenging quarter clouded by the evolving regulatory landscape while maintaining long-term upside potential in a post-PMTA [premarket tobacco product application] environment.
“Turning to capital deployment, we increased our share repurchase activity during the quarter and continue to maintain a strong balance sheet. Going forward, I am eager about the opportunity to work with a great organization, continue our momentum and invest further to deliver future organic and inorganic growth.”
In related news, TPB entered into an agreement with Flamagas, a lighter manufacturer, for exclusive distribution of Clipper lighters in the United States and Canada.
“Given Flamagas’ global reach and renowned product portfolio, this partnership represents a tremendous opportunity to expand Clipper’s reach in the United States and Canada,” said TPB Senior Vice President ff Sales And Marketing Frank Vignone in a statement.
February 22, 2022