Category: Business

  • Turning Point Invests in Cannabinoid Business

    Turning Point Invests in Cannabinoid Business

    Photo: Herbal Hemp from Pixabay

    Turning Point Brands (TPB) will invest $15 million Dosist, a global cannabinoid company. It has also signed an exclusive co-development and distribution agreement for a new CBD brand, created in partnership with Dosist’s THC-free business unit.

    TPB has an option to invest another $15 million at predetermined terms within the next 12 months.

    “The cannabis market is exploding, and now is the opportune time to invest in the space and significantly expand our addressable market,” said Larry Wexler, CEO of TPB, in a statement. “With its leadership in results-oriented plant-based formulas and dose control technology, global recognition, consumer trust and scalability, Dosist was the clear choice to be our new partner in this critical growth market.”

    “We are extremely proud to partner with Turning Point Brands on our next phase of growth and distribution as we continue to transcend the way consumers think about their health and wellness,” said Gunner Winston, CEO of Dosist. “Turning Point’s leadership team has demonstrated remarkable foresight and vision about the future and opportunity for federally legal cannabinoid products. The synergy between our brands around this scope and mission is incredible and we are excited by what we will achieve together with this partnership.”

    Dosist’s cannabis products are currently available in California, Colorado, Nevada and Canada, serving a total dispensary network of more than 700 stores. The company has plans to launch into key new markets in the coming months, adding geographies as they continue their North American expansion.

  • Japan Tobacco Invests in its Trier Factory

    Japan Tobacco Invests in its Trier Factory

    Japan Tobacco International (JTI) has invested €22.5 million ($26.6 million) in expanding production at its Trier, Germany, plant, reports Lokalo.de.

    “Our plant in Trier has a special place in the JTI group,” said Peter Kilburg, plant manager. “We are one of only two plants in which all production steps are mapped—from raw tobacco storage to preparation and processing of the tobacco to the finished product. The investment in the double-digit million range strengthens the strategic importance of the Trier plant within JTI’s global supply chain—it is a clear commitment to the Trier production location.”

    Further investments are planned for the coming years.

    JTI invested €30 million in 2001 for the construction of the facility.

  • Mignot & De Block Buys EFKA Tube Factory

    Mignot & De Block Buys EFKA Tube Factory

    Photo: EFKA

    Imperial Tobacco has sold its EFKA filter tube factory in Trossingen, Germany, to F + C Papiervertriebsgesellschaft for an undisclosed amount.

    The buyer is part of Mignot & De Block, a Dutch group known in Germany mainly through its subsidiary, Gizeh Raucherbedarf.

    Imperial Tobacco discontinued filter tube production in Trossingen in the first half of 2020 in the wake of declining production quantities and the loss of trademark agreements.

    The EFKA brand, patents and other trademark rights remain property of Imperial Tobacco.

    “EFKA has been an integral part of Trossingen for more than 108 years,” said Helmut Rutschke, managing director of EFKA. “To have to halt our production here is still very painful personally, particularly with regard to the employees affected. On the other hand, we are pleased to be able to hand the location over to a buyer that wants to continue production—and, with it, an important part of Trossingen’s economic tradition. We wish all parties involved every success.”

    Christian Hinz

    “We are delighted to lead a well-positioned production location with highly qualified employees into a new future, even beyond the production of filter tubes,” said Christian Hinz, CEO of the Mignot & De Block Group Germany. “Our investment in the site is long-term and growth-oriented.”

    A total of 121 employees were affected by the halt of production at EFKA in Trossingen. Imperial Tobacco presented them with a variety of support offers and an extensive social plan.

  • JT Completes Head Office Relocation

    JT Completes Head Office Relocation

    Photo: Taco Tuinstra

    Japan Tobacco (JT) has completed the relocation of its head office to the Kamiyacho Trust Tower from the JT Building.

    JT will occupy five floors from the 26th floor upward, with JT’s general reception located on the 30th floor, the company wrote in a press release.

  • TPB Takes Stake in Hemp Cigarettes

    TPB Takes Stake in Hemp Cigarettes

    Photo: Wild Hempettes

    Turning Point Brands (TPB) has acquired a 20 percent stake in Wild Hempettes, a leading manufacturer of hemp cigarettes under the WildHemp and Hempettes brands, with options to increase its stake to a 100 percent ownership position based on certain milestones.

    As part of the transaction, the Wild Hempettes joint venture was spun off from Crown Distributing and formed as a vehicle for TPB to be the exclusive distributor of Hempettes to U.S. brick-and-mortar retailers under a profit-sharing arrangement.

    Wild Hemp was an early entrant into the hemp CBD smoking market with its Hempettes branded cigarette, the leading 20-count pack hemp smoking product in the U.S. The product is currently available in three popular styles: original, sweet and pineapple blaze. An additional menthol SKU will be added to the brand lineup by the end of 2020.

    “The combination of our Hempettes product along with TPB’s distribution presence in over 210,000 outlets in North America provides tremendous growth potential,” said Zain Meghani, Wild Hempettes CEO in a statement.

  • Republic Buys French E-Liquid Maker

    Republic Buys French E-Liquid Maker

    Republic Technologies International (RTI) has bought Innovative – So Good to expand the scope of its business. The acquisition bolsters RTI’s presence in the e-cigarette segment and establishes the company as a major player in premium certified French origin e-liquids.

    Based in Angouleme, France, Innovative – So Good manufacturers e-liquids and distributes equipment exclusively available through the tobacconists’ network.

    “So Good is a recognized brand and customers appreciate the high quality of its liquids,” said RTI Managing Director Olivier Partouche, who oversaw the purchase. “Thanks to the work of Cedric Lacouture and his teams, it has become a major premium brand available through the tobacconist network. The complementary nature of our E-CG liquids was obvious to us and this merger will help us further expand our product offering and enable us to support tobacconists as they grow this new segment.”

    “Our joining forces with Republic Technologies through the E-CG brand is excellent news for our customers,” said Lacouture, So Good’s founder. “In the short term, they’ll get access to a comprehensive offering of e-liquids, e-cigarettes and items for smokers. Of all the acquisition proposals that we received, [RTI’s] was the most persuasive as far as So Good’s future and its development are concerned.”

    For more than 150 years, the Republic Technologies group has been developing and manufacturing cigarette paper under the OCB, Job and Zig-Zag brands. Building on its industrial experience, the group has been selling e-liquids and vaping accessories under the E-CG brand since 2015.

  • Prime Minister asks BAT to Stay in Croatia

    Prime Minister asks BAT to Stay in Croatia

    Photo: TDR

    The government of Croatia is trying to convince British American Tobacco (BAT) to stay in Kanfanar, reports SeeNews. In June, reports surfaced that the company might relocate its Croatian factory to another country.

    “We are holding talks; I am sure that we will reach a quality agreement that will enable them to stay in Croatia,” Prime Minister Andrej Plenkovic said in a press release on Tuesday. 

    BAT acquired the cigarette factory in 2015 when it acquired Tvornica Duhana Rovinj. At the time of its entry into Croatia, BAT signed a deal to stay in the country at least five years, according to Plenkovic. In 2018, BAT announced a €40 million investment in its Kanfanar facility.

    The factory in Kanfanar currently produces 12 billion cigarettes per year. Its production capacity is 20 billion units. 

    In June, Glas Istre reported that some 500 employees could lose their jobs if the tobacco giant moved its Kanfanar production abroad. 

  • Universal Buys Silva International

    Universal Buys Silva International

    Photo: Jerzy Górecki from Pixabay

    Universal Corp. has entered into a definitive agreement to acquire Silva International, a privately held, natural, specialty dehydrated vegetable, fruit and herb processing company, for $170 million in cash. Following the close of the transaction, Silva will operate as part of Universal’s plant-based ingredients platform, which includes FruitSmart and Carolina Innovative Food Ingredients.

    Founded in 1979, Silva procures over 60 types of dehydrated vegetables, fruits and herbs from more than 20 countries around the world. In addition to sourcing, the company specializes in processing natural raw materials into custom designed dehydrated vegetable- and fruit-based ingredients for a variety of end products. Headquartered in Momence, Illinois, Silva employs more than 200 people and has a 380,000 square foot manufacturing facility.

    George Freeman

    “We’re excited to have reached this agreement with Silva as we continue to diversify our offerings and generate new opportunities for value creation,” said George C. Freeman III, chairman, president and chief executive officer of Universal Corp. “This acquisition builds on our investment in FruitSmart and expands our plant-based ingredients platform. With this acquisition, we expect these businesses to represent 10 percent to 20 percent of our EBITDA by fiscal year 2022, ahead of our previously stated target outlined as part of our capital allocation strategy.”

    Universal Corp. expects the transaction to close in October of this year, subject to customary closing conditions. The company anticipates its acquisition will be accretive to earnings in the first fiscal year following closing and expects to fund the transaction with cash on hand and borrowings under its committed revolving credit facility.

  • Taat Secures Production Capacity

    Taat Secures Production Capacity

    Taat Lifestyle & Wellness has secured commercial-scale production capacity for its tobacco-free and nicotine-free Beyond Tobacco cigarettes with a manufacturer in North America, the company announced in a press release.

    The manufacturer, whose name cannot be disclosed under the terms of the agreement, does production on a contract basis for global and regional brands of both tobacco and hemp cigarettes.

    According to Taat, the agreement provides terms for production of Beyond Tobacco cigarettes at pricing that is lower than tobacco industry averages for full-service cigarette production for an initial duration of one year, with renewal of such pricing terms conditional upon the company meeting a first-year production quota.

    The manufacturer has also agreed to warehouse Beyond Tobacco cigarettes after they are produced, while also providing outbound logistics services by coordinating the shipment of Beyond Tobacco pallets to the company’s distributors. To protect its trade secrets, Taat will continue to process the Beyond Tobacco base cigarette material in-house.

    “While our agreement with the manufacturer precludes me from going into too much detail, I can certainly say that I am very pleased to have them on board to manufacture Beyond Tobacco cigarettes for us,” said Taat CEO Setti Coscarella.

    Tim Corkum

    “Aside from being able to produce at a much lower cost compared to our initial estimations, working with an established player in the cigarette production space enables us to benefit from their industry-leading standards in machinery, quality control and efficiency.”

    In related news, Taat recently appointed Tim Corkum as its chief revenue officer to lead commercialization efforts for Beyond Tobacco cigarettes. Corkum, who spent more than 20 years working for Philip Morris International in the Caribbean and in Canada, is a recognized industry leader in the commercialization of cigarette products as well as reduced risk products.

     

  • More Restructuring and Job Cuts at Juul

    More Restructuring and Job Cuts at Juul

    Photo: Juul Labs

    Juul Labs is planning another major restructuring effort that includes layoffs and cost-cutting, according to reports in The Wall Street Journal and the Pittsburgh Post-Gazette. The e-cigarette maker is also considering halting sales in Europe and Asia, reducing its footprint to its core markets of the U.S., Canada and the U.K.

    “To better serve our mission, we must prioritize how we use our resources to execute on our long-term, focused approach,” the company wrote in a statement.

    It’s the third major shakeup since September as Juul attempts to revamp its strategy in the face of heightened scrutiny of vaping.

    The bulk of the cuts will hit Juul’s marketing department. Juul said it would cut 150 jobs and phase out the position of chief marketing officer, adding to 500 reductions announced in October. In total, the company is slashing 650 jobs, or 15 percent of its global workforce.

    “As the vapor category undergoes a necessary reset, this reorganization will help Juul Labs focus on reducing underage use, investing in scientific research, and creating new technologies while earning a license to operate in the U.S. and around the world,” Juul CEO K.C. Crosthwaite was quoted as saying.

    The company’s future advertising efforts will focus on direct marketing. It’s still enforcing its strategy of avoiding TV, print and online marketing.

    Juul said it will continue to invest in its product team as the company explores new technologies to combat underage use. The company has reportedly submitted to the U.S. Food and Drug Administration a new version of its vaporizer designed to unlock only for users at least 21 years old.

    Juul’s value has deteriorated as concerns mounted about the health risks of vaping and U.S. regulators pushed for a crackdown on e-cigarettes. Juul was also criticized for selling flavored pods that became popular with teens. Altria, which invested $12.8 billion for a 35 percent stake in Juul in 2018, recently wrote down its investment by $4.5 billion.