tobaccointernational.com
The authority on the tobacco industry since 1886 June 2019
The Biggest Cigarette Smuggling Problem in the U.S.
HOW JTI IS MAKING PROGRESS TOWARD TOBACCO SUSTAINABILITY
COULD BREXIT MAKE HOW A CODING A SMOKER BRITAIN’S STATION APPROACH PRIME MINISTER? HELPS IN A TRACK & TRACE PROGRAM
A JOINT LEAF VENTURE IS ONE STEP CLOSER IN NAMIBIA
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TI TABLE OF CONTENTS 16
A LOCKWOOD PUBLICATION
22
tobaccointernational.com
The authority on the tobacco industry since 1886 June 2019
24 20
The Biggest Cigarette Smuggling Problem in the U.S.
HOW JTI IS MAKING PROGRESS TOWARD TOBACCO SUSTAINABILITY
FEATURES 16 Smuggling Smokes. Which
28
American state has the biggest problem with smuggled cigarettes? Two recent studies—but no surprises—on the contraband question. Staff Reports
20 Could Brexit Lead to Britain’s
tobacco product called Pulze could play a big part. Staff Reports
First Pro-Smoking Prime Minister? All eyes are on Nigel Farage and his pro-smoking Brexit stance. By Bob Crew
28 Track & Trace Pack Program
22 JTI Make Progress Toward Tobacco Sustainability. Reduced environmental footprint and contribution to the community are important parts of the equation. Staff Reports 24 A Good Six Months for Imperial. What Lies Ahead? An innovative heated
30 A Low Oxygen Solution. Universal sets things aright after the cyclones in Africa. There was infrastructure damage, but will supply and timing of leaf shipments be affected?
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6 TOBACCO INTERNATIONAL JUNE 2019
A JOINT LEAF VENTURE IS ONE STEP CLOSER IN NAMIBIA
ON THE COVER The bright lights of New York City appeal to almost everybody but especially cigarette smugglers with contraband to sell in high-excise-tax states. See “Smuggling Smokes,” pg. 16, for statistics and recommendations on dealing with illegal smokes.
Enlists Coding Station Approach. Program is specifically designed for conveyor-based OEM packers up to speeds of 500ppm. Staff Reports
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COULD BREXIT MAKE HOW A CODING A SMOKER BRITAIN’S STATION APPROACH PRIME MINISTER? HELPS IN A TRACK & TRACE PROGRAM
DEPARTMENTS 8
Editorial
10 TI Digest 32 Leaf News 34 Calendar, Advertiser Index To reuse Tobacco International material, ISSN: 0049-3945 (print), ISSN: 2331-8481 (online), access www.copyright.com for the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit providing various licenses and registration.
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TI EDITORIAL
PUBLISHER & PRESIDENT
Robert M. Lockwood EDITOR-IN-CHIEF
On Smuggling, Brexit and an all-Virginia Cigarette
Christopher Bickers PRODUCTION COORDINATOR
Which state in the Union has the dubious distinction of ranking number one in smuggled cigarettes? The answer to that question is laid out in detail in this month’s story “Smuggling smokes.” Now, I am sure I am not revealing anything that anybody doesn’t know when I say that New York has continued to be the top in-bound smuggling destination in the United States. But the scale of the situation did surprise me a bit: Nearly 56 percent of all cigarettes consumed in New York were smuggled in from somewhere else! See page 16 for several surprises on the subject of contraband. JTI has a strong opinion on smuggling as well. Besides the many other ills illegal trade causes, “It threatens wider society as organized crime networks involved in illegal tobacco trade are often also involved in human trafficking and terrorism.” For more see” JTI Makes Progress Toward Tobacco Sustainability” on page 22. Could Britain’s next Prime Minister be pro-smoking thanks to Brexit? The maverick English politician Nigel Farage could turn out to be a refreshing change politically speaking with his unashamed taste for cigarettes, going along with his rabid endorsement of Brexit. The United States is the home of the American blend cigarette—fluecured, burley and Oriental—and since early in the last century, almost all brands made here have followed that recipe. But now a group of farmers in the Southeast U.S. is taking the chance that consumers might switch to a high-quality British blend cigarette that contains nothing but flue-cured and a little water. They call it Manitou and are marketing it themselves. Learn more about it on page 13. Speaking of new products, Imperial has just launched an innovative heated tobacco product called Pulze as a test in Japan. It is part of a number of new initiatives the company has going. See “A good six months for Imperial” on page 24. Also this month, we report on ITG Brand’s new CEO, Oliver Kutz, who has taken the leadership role at Imperial’s affiliate in Greensboro. Read the details on page 27. Also on page 27, you will find a report from Universal on the effect of the recent cyclones in Africa. And on page 30, learn about a new approach to the problem of controlling insects in stored tobacco in the story “A low oxygen solution.” And look next month for more tobacco news and analysis in our July/August issue.
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Frank B. Schuetze ACCOUNTANT
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CONTRIBUTORS INTERNATIONAL TOBACCO Dr. Iqbal Lambat (ISTANBUL, TURKEY) ECONOMIC COLUMNIST John Parker (RICHMOND, VIRGINIA) REGIONAL
Mumtaz Ahmad (ISLAMABAD, PAKISTAN) Diamantis Chras (PIRAEUS, GREECE) Bob Crew (LONDON, ENGLAND) Eugene Gerden (MOSCOW, RUSSIA) Guido Jungbluth (SANTA CRUZ DO SUL, BRAZIL) Manfred Körner (HAMBURG, GERMANY) M. Rifaat Naguib (CAIRO, EGYPT) Vladislav Vorotnikov (MOSCOW, RUSSIA)
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Volume 19, No. 4 TOBACCO INTERNATIONAL (ISSN 0049-3945 print; ISSN 2331-8481 online), established in 1886, is published six times a year, with two monthly issues (September & December) and four combined issues (Jan/Feb/Mar, June/June, DECEMBER, Oct/Nov) plus a directory issue published in January of each year by Lockwood Trade Journal Co., Inc., 3743 Crescent Street, Second Floor, Long Island City, NY 11101, USA. Officers: Robert M. Lockwood, president and treasurer. Subscription rates: USA—US$49 per year, US$74 for two years; US$109 for three years. Canada—US$59 per year, US$89 for two years, US$134 for three years. All other countries: International Surface Mail—US$89 per year; US$139 for two years; US$199 for three years. International AirMail—US$129 per year; US$199 for two years; US$289 for three years. Single copy price: US$15. Annual Buyers’ Guide & Directory: US$45, plus shipping. Copyright ©2019 by Lockwood Publications, Inc. The contents of TOBACCO INTERNATIONAL may not be reprinted except by permission. POSTMASTER: Send address changes to TOBACCO INTERNATIONAL, 3743 Crescent Street, 2nd Floor, Long Island City, New York 11101, USA.
8 TOBACCO INTERNATIONAL JUNE 2019
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TI DIGEST
A new oral nicotine pouch product, on! is derived from tobacco.
UNITED STATES Gets It on! Altria Buys Oral Nicotine Pouch Product RICHMOND , VA .—Altria Group has agreed with the shareholders of Switzerland-based Burger Söhne Holding AG to acquire 80 percent ownership of certain companies of the Burger Group that will commercialize on!, an oral tobacco-derived nicotine (TDN) pouch product. “We’re excited to add on! to our companies’ terrific non-combustible portfolio,” said Howard Willard, Altria’s Chairman and Chief Executive Officer. “This acquisition will add another non-combustible product to our portfolio in what we believe is a high-potential, rapidly-developing category.” Upon closing, Altria will invest $372 million for an 80 percent ownership interest. Altria expects to complete the transaction in the second half of 2019, subject to customary closing conditions. It will finance the transaction with available cash. Altria will distribute on! across the United States in advance of the transaction closing, which is expected to allow Altria to quickly expand retail distribution. The on! portfolio consists of seven flavors and five nicotine strengths for a total of 35 SKUs. It is currently available in limited distribution in several thousand U.S. retail outlets, as well as in Sweden and Japan. It is also sold via e-commerce. “We’re excited to put our resources behind on! and participate in what we expect to be a fast-growing category,” said Allison Bolyard, Senior Director and General Manager of Helix, Altria’s new subsidiary that will be the parent company of the Burger Group subsidiaries currently manufacturing and selling on! “Combining our deep understanding of adult tobacco consumers and Altria’s best-in-class sales and distribution infrastructure, we expect to drive the on! brand toward sustainable, long-term leadership.”
UNITED ARAB EMIRATES For Displaying Print Finishing Products, World Tobacco Shone DUBAI—The World Tobacco Middle East Dubai in April was a “huge success,” said Daniel Lustenberger, Senior Area Manager Marketing & Sales for Web-Fed Solutions, Bobst Mex SA., whose company exhibited there. “It allowed BOBST and its partners to demonstrate how recognized and re-
quested trends for packaging across the tobacco industry are being met by innovative finishing techniques, coatings and packaging technologies,” he said. It helped that BOBST, a leading supplier of equipment, was able to exhibit alongside partners IST Metz GmbH (UV technology) and Schmid R hy ner AG (U V a nd water-based coat i ngs). T he sha red ex h ibit ion stand enabled customers to explore
10 TOBACCO INTERNATIONAL JUNE 2019
the entire printing spectrum for tobacco packaging, from printing to coating and drying, through the latest UV technology, up to finishing. Volker Selg, head of sales Web at IST Metz, said, “Providing a qualified and full picture of needed technology for the printing, the curing and the impressive opportunities created a lot of attention.” BOBST, a leading supplier of equipment and services to packaging and label manufacturers in the folding carton, corrugated board and flexible materials industries, also offers a range of market gravure printing technologies to meet key trends in the tobacco market and add competitive advantage, including Lemanic Riviera ILS®. Featuring 30 percent shorter web path than conventional presses and the ILS (Intelligent Line Shaft) solution, the gravure printing press can print challenging graphic designs on the widest variety of substrates. Special effects such as soft touch, matt varnishes and tactile lacquers are still prominent in tobacco packaging, said Jakob Rohner, CEO Schmid Rhyner AG. “Silver, such as our Silver Polar, is rising in demand. The perfect combination of quality infrastructure and quality consumables will make the difference in the end.” More companies are looking at the attractive effects of replacing metallized board, not only for economic reasons, but also to improve the overall CO2 footprint by replacing laminated boards with white boards. BOBST and its partners are promoting sustainable solutions through printing of high gloss silver. BOBST Lemanic Riviera ILS provides up to 15 color-printing, hybrid-printing technologies and double-sleeve-embossing units. Lemanic Riviera ILS is the flagship of printing and in-line converting technology for the tobacco and general folding carton market segments of packaging production.
vision
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TI DIGEST the sky an “Agate” color. The product’s late harvested and fully ripened leaves refer to matured Virginia tobacco leaves. Compared with the ordinary ones, the matured leaves feature light sweetness, as well as richer taste and smoke.
SOUTH AFRICA JAPAN
Proposed Anti-Tobacco Legislation Could End Up World’s Most Draconian
JT Announces New Products
CAPE TOWN —A
TOKYO —Japan
Tobacco launched in May its first-ever limited-edition seasonal tobacco flavors for Ploom TECH, JT’s tobacco-infused vapor product with low temperature heating technology. The new flavored capsules consist of “MEVIUS Muscat Cooler for Ploom TECH” and “Pianissimo Lemon Lime Cooler for Ploom TECH.” These two products will be available from June 4 at the online store and Ploom shops for a limited time. Another new product from Japan Tobacco launched in May is the Camel brand “Camel Box,” which will roll out nationwide in Japan on July 26. “Following the successful launch of two new Camel brand products in June 2018, we are presenting Camel Box, a brand-new product with 12mg tar, [selling] at 400 yen per pack,” said Takashi Araki, Vice President of the Marketing Group Product & Brand Division. “The solid tobacco taste of ‘Camel Box’ is achieved by [its] balanced authentic American Blend.” Finally, in late July, JT will launch “Natural American Spirit Agate” nationwide in late July 2019. Consumers of Agate will be able to enjoy the strong f lavor of late harvested and fully ripened leaves with authentic aroma and enriched taste, the company said. The Agate cigarette will feature densely packed tobacco and freedom from additives. The packaging will depict the moment where the dynamic sunset paints
draft tobacco products control bill that has been introduced in South Africa would not only ban smoking in all public places. It would also to send to jail those who smoke or encourage smoking in those places. And by the way, public places in this proposed legislation would include ‘enclosed workplaces,’ in the view of its authors. It had not been enacted at the time of this writing. If enacted, this might turn out to be the toughest anti-smoking legislation anywhere in the world, if passed by the majority ANC government. Smoking would also be banned in vehicles with passengers, while manufacturers of cigarettes and electronic tobacco devices will be forced to remove “all branding on packaging, with an exception to the company’s logo.” Non-compliance would risk a five-year prison sentence. Tobacco packaging would have to have a “uniform plain color and texture.” “Tobacco use is extremely injurious to health of smokers, non-smokers and other users of tobacco products,” the bill observes. This bill was introduced in South Africa in response to last year’s Worldwide “No Tobacco Day.”
UNITED KINGDOM A Stronger, Simpler Business at BAT LONDON —A
change in its approach to new brands category will be part of the way British American Tobacco cre-
12 TOBACCO INTERNATIONAL JUNE 2019
ates a “stronger, simpler” business in the near future, said Jack Bowles, BAT Chief Executive. In the company’s pre-closing report for the first half of 2019, Bowles said, “With our focus on building global brands, we intend to consolidate our New Category portfolio into fewer brands. Our Strategic Brands continue to take share, while new product launches and a sharpened focus on priority markets and products are expected to drive stronger New Category growth in the second half.” BAT is on track for a good performance in 2019, he added. “Revenue and adjusted operating profit growth [are] in line with our guidance and delivery of high single figure FY adjusted diluted EPS growth at constant rates of exchange.” All of this is based on the foundation of a strong combustible business. There was one slightly unexpected note in BAT’s report. “ The U.S. is performing well with volume in line with expectations,” it said. “U.S. industry volume decline remains within historic ranges, with Sales to Retail (STR) down 5.3 percent YTD. We expect FY industry volume to be down 4 percent to 5 percent, driven by earlier cigarette price increases and rising gas prices.”
BAT Science Website Gets New Look LONDON —British
American Tobacco’s dedicated science website (bat-science.com) has been transformed to showcase the science and innovation behind the company’s potentially reduced-risk products (PRRPs), said David O’Reilly, Scientific Research Director at BAT. The original site was launched in 2008 and was a first for the tobacco industry, reflecting BAT’s commitment to openly and transparently communicating its scientific research.
UNITED STATES Will an All-Virginia Cigarette Find Favor in the United States? RALEIGH, N.C.—The
U.S. [Flue-Cured] Tobacco Cooperative has announced that it plans to manufacture and market a new super-premium cigarette. Called Manitou, it will be a cigarette of the “Virginia” or “British” type, meaning it will contain only flue-cured tobacco. And the flue-cured tobacco will be exclusively grown in the United States by grower members of the cooperative, and only upper-stalk flue-cured leaf produced by those growers will be used. Virtually all other American cigarette brands have been made using a blend of flue-cured, burley and oriental tobaccos—i.e., the “American blend”—since Richard Joshua Reynolds introduced Camel, the first American blend, in 1914. Before that, “British” blend cigarettes were the leading type on the U.S. market. “Manitou cigarettes contain no reconstituted sheet tobacco, stems or fillers, [and] no additives and no artificial flavors,” a spokesman for USTC said. “Manitou cigarettes are 100 percent free from chemical additives like artificial preservatives, humectants or synthetic flavors commonly found in other brands. Manitou blends only contain water and tobacco.” “We know consumers and retailers are looking for alternative products in this category; one that is truly 100 percent grown and made in America,” said Russ Mancuso, USTC senior vice president of consumer products. The company planned to roll out soon a full marketing campaign spanning print ads, point-of-sale ads and a website to educate consumers about the product. Manitou cigarettes will be available in six varieties: bright-mellow taste; full-bodied taste; smooth, mellow taste; smooth, rich taste; full-bodied mellow taste; and a dark, rich and mellow taste. Manitou cigarettes will be distinguished through packaging. “The packaging designs combine bold color com-
In keeping with BAT’s commitment to transform tobacco, the newlook bat-science.com offers clear scientific information around vapor, tobacco heating and modern oral products, as well as a deep dive into scientific studies and product development. It also features videos and animations which bring to life how our products work, how they are tested and what test results tell us.
Manitou’s colorful cigarette packaging.
binations and finishing treatments that elevate the brand. Each pack and carton have embossed textures and has a special sand varnish applied to the edges to let the adult consumer know they are holding something different,” Mancuso said. USTC’s consumer products division, Premier Manufacturing of Chesterfield, Mo., will market Manitou, which some observers expect will compete with Natural American Spirit cigarettes. Although it has never been confirmed by the company, it is widely believed that most of the Natural American Spirit blends are made with a high percentage of flue-cured. The USTC growers have taken quite a hit since the Chinese withdrew from the American leaf market as a result of the Trump tariffs last year. All of China’s leaf purchases in recent years prior to the tariffs were believed to be flue-cured, since the dominant cigarette blend in China is all Virginia. It was not immediately apparent as to whether USTC’s Manitou was related to a line of German cigarettes and smoking tobacco with the brand name Manitou. The manufacturer of that line advertises that it is all Virginia tobacco but according to its advertising, it hasn’t been limited— at least to this point—to American leaf. Manitou is a Native American word referring to a primitive life force, refleting perhaps the Native American presentation of Natural American Spirit.
The updated site is intended for a broad audience, including public health communities, journalists, scientists, and consumers with an interest in science. New sections on the site include: • Product science, which provides an overview of how PRRPs work and how they are tested by BAT scientists; • Pro Zone, a space for science profes-
sionals to access detailed research and studies on PRRPs; • Innovation—the science and technology behind our latest products and innovations. “We are very proud of our open and transparent approach to scientific research, and bat-science.com is the perfect place to showcase the science behind our PRRPs,” said O’Reilly.
JUNE 2019 TOBACCO INTERNATIONAL
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TI DIGEST “The site has a fresh new look and educational content designed to inform, inspire and engage audiences around the world.” Chris Proctor, Group Head of PRRP Science, added: “The bat-science.com website is well known within the scientific community, and I’m delighted that we now have a more dynamic, PRRP-focused website that will appeal to all our stakeholders. Sitting alongside our visitor program and biennial Science & Technology Report, the new website will help to strengthen our unique scientific engagement program.”
Vapor and Heated Tobacco Cause Less Staining LON DON —Research
by scientists at British American Tobacco have shown t hat aerosol f rom potent ia l ly reduced-risk products (PRRPs), such as vapor and tobacco heating products (THPs), cause significantly less staining to tooth enamel, skin, cloth and wallpaper than does the smoke from conventional cigarettes. In research results presented at the recent Global Forum on Nicotine in Warsaw, Poland, John McAughey, BAT Principal Scientist for aerosol science, said, “A lack of combustion and significantly reduced emissions from glo as compared to conventional cigarettes mean there is less material to deposit and odor to linger. Again, this reflects consideration for
others by those using the glo product.” These results show switching completely from cigarettes to vapor products or THPs may offer cosmetic and social benefits for consumers, said Senior Scientist Annette Dalrymple, who presented the results at the conference. “These benefits around social consideration and personal hygiene are really resonating with users.
UNITED STATES Juul’s prospects for FDA seem faint, says former commissioner WASHINGTON—The
Juul vapor product may never get government approval for sale in the United States, contends Scott Gottlieb, who until recently was the Commissioner of the Federal Food and Drug Administration. Gottlieb told the American television news channel CNBC that approval will be difficult. “Juul is in a hard spot to ever get their product approved,” Gottlieb said. “They have so much historical youth use with their product, I don’t know how Juul gets through an application process.” FDA originally proposed that e-cigarette manufacturers apply for regulatory approval by 2022. But a U.S. district court recently ruled that an earlier deadline must be imposed, and FDA proposed 10 months This is a crucial change for Juul, Gottlieb told CNBC. Juul may have wanted to get a revamped “kid proof ” product
together for review. “But if applications are required to be due sooner, they won’t have time to do that,” he suggested. The company is working on “a comprehensive application to demonstrate the potential public health impact of Juul products, including the unprecedented rate at which our products are switching adult smokers from combustible use, which will be reviewed by FDA technical and scientific experts,” said Juul spokesman Ted Kwong. “Taken together with our industry-leading action on youth prevention and hopefully category-wide actions from FDA in the near future, we are confident adult smokers will not be left without a viable alternative to combustible cigarettes, the leading cause of preventable death,” he said.
African Cyclones Devastating But Leaf Operations Not Materially Affected RICHMOND , VA .—The
effect of the recent cyclones in Mozambique, Malawi, and Zimbabwe was devastating, but George C. Freeman III, Chairman, President, and Chief Executive Officer of Universal Corporation, said the company, which has operations in those countries, is not expecting “a material effect from the cyclones on upcoming crop sizes or shipment timing.” “We are deeply saddened by the loss of life and the devastating damage caused by the recent cyclones and [Uni-
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14 TOBACCO INTERNATIONAL JUNE 2019
Making Light Work
UNITED STATES ITG Brands Appoints a New CEO; Oliver Kutz is Third Top Exec in Four Years GREENSBORO, N.C .—Oliver Kutz is the new chief executive officer of Imperial’s U.S. affiliate, ITG Brands. Kutz has worked for 20 years for Imperial Brands, most recently as the general manager of the Russia-AAAA division. He joined the company in 1999 and has since undertaken a number of international leadership roles. “Oliver Kutz brings a wealth of international experience in tobacco and next generation products to ITG Brands,” said Dominic Brisby, Imperial Brands’ Division Director for the Americas, Africa, Asia and Australia. “This will further drive our performance and build on our strong capabilities and worldclass brands.” Kutz replaces Dan Carr, who reportedly left the company to purOliver Kutz sue other interests. Kutz is the third
versal Corp. is] supporting humanitarian aid and recovery efforts in the region,” Freeman said. Universal was fortunate to sustain minimal impact on employees, facilities, crops and stored tobacco awaiting shipment at Beira, Mozambique, he said. “Although there was infrastructure damage from the cyclones in Mozambique, production, transportation and port activities are returning to normal in the areas in which we operate.” In other observations from Universal’s annual report (all details referring to Universal operations): In the United States, the benefits Universal enjoyed from increased shipment volumes during the quarter ended March 31, 2019, compared to the same quarter in the prior year were more than offset by reduced margins due to lower crop yields and processing volumes as a result of adverse weather during the growing season. In both Africa and South America, sales volumes were higher in the same period, but the product mix was less favorable.
CEO ITG Brands has had since it was formed in 2015. In addition to Kutz’s appointment to the CEO and President position, ITG Brands has announced the addition of Kim Reed as the company’s Kim Reed executive vice president of sales. Reed has nearly 30 years of experience in the consumer-packaged goods industry and will report directly to Kutz. Previously, Reed worked at Kellogg Company where she was general manager of U.S. Sales. She has held key leadership positions at both the Kellogg Company, which she joined in 2006, and the Pepsi Bottling Group. ITG Brands is the third-largest tobacco company in the United States. Local media reported that ITG had a 7.2 percent market share as of May 18. The legendary cigarette brand Winston by itself accounted for a 2.1 percent market share, with Kool and Maverick each providing a 1.6 percent share.
In Asia in the same period, sales volumes in Asia were lowering the same period, in part due to shipment timing. Selling, general, and administrative costs were higher on higher customer claim valuations and provisions on farmer advances. These were partially offset by positive foreign currency remeasurement and exchange variances and lower sales commission expenses. Universal’s net income for the fiscal year ended March 31, 2019, was $104.1 million, or $4.11 per diluted share, compared with $105.7 million, or $4.14 per diluted share, for the prior fiscal year.
Counterfeit E-cigs from China Flood U.S. WASHINGTON —Chinese
manufacturers have flooded American convenience stores with counterfeit and potentially dangerous vape pods, frequently featuring kid-friendly vape flavors like “juice box” and “candy cane,” Senator Chuck Schumer of New York said in June. “I have to give the Food and Drug
Administration credit, they did a very good job telling American manufacturers you can’t do this,” said Schumer. “But the Chinese don’t care. Like in so many other instances, Chinese companies violate our laws to make a fast profit.”
NAMES IN THE NEWS Jon Stanton has joined the Board of Imperial Brands and will also be a member of the audit committee and succession & nominations committee. Stanton is Chief Executive of Weir Group PLC. Prior to that, he spent 22 years at Jon Stanton Ernst & Young. Therese Esperdy has succeeded Malcolm Wyman as Senior Independent Non-Executive Director at Imperial Brands. Wyman stepped down for personal reasons. Therese Esperdy
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Photo: Lindsay Fox, Ecigaretteviewed.com, CC BY-SA 2.0
SMUGGLING
Smuggling Smokes Which U.S. States have the most smuggled cigarettes? New York still leads, but California is catching up. Staff Reports t is an article of faith that American states with higher excise taxes typically have higher rates of illicit trade, or smuggling. A new estimate of cigarette tax evasion and avoidance among the states released by the Mackinac Center for Public Policy confirms once again just where this concept stands in the 21st Century. It is based on data from 2017, the most recent year for which statistics are available. Not surprisingly, New York continued to be the top in-bound smuggling state in the nation. Nearly 56 percent of all cigarettes consumed in New York were smuggled in from elsewhere. This is unsurprising, as the state’s excise tax of $4.35 per pack is tied for the highest in the nation.
I
California Second Also unsurprising is the jump in the rankings by California. The state passed a $2 per pack tax hike in 2017, which contributed to the Golden State’s smuggling rate increasing to 44.6 percent, making it the second highest in the nation. After California, the top-ranked states for smuggling are Washington (42.8 percent), New Mexico (40.8 percent) and Arizona (39.3 percent). Michigan ranks 14th in the nation, with 21 percent of all cigarettes
consumed in the Great Lake State smuggled in. The degree of cigarette tax evasion and avoidance in high-tax states is remarkable, said study co-author Michael LaFaive, senior director of the Mackinac Center’s Morey Fiscal Policy Initiative. “Smokers are obviously not lining up like cows to be milked or sheep to be sheared.” The study, entitled “Smuggled Smokes: California Closes in on New York,” also looks at states that export cigarettes. These states typically have a lower excise tax. The update found that New Hampshire continued to export the most cigarettes; for every 100 cigarettes consumed, an additional 65
The degree of cigarette tax evasion and avoidance in high-tax states is remarkable, said the study. “Smokers are obviously not lining up like cows to be milked or sheep to be sheared.”
16 TOBACCO INTERNATIONAL JUNE 2019
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SMUGGLING are smuggled out of the state. “With current tax gaps, politicians of every stripe are giving people incentives to save a buck by crossing borders in search of lower-priced tobacco products,” said the study’s authors Todd Nesbit, professor of economics at Ball State University; Michael Lucci is vice president of state tax projects at the Tax Foundation in Washington, D.C., and LaFaive. Where Big Money Is Worse, they’re announcing to the world’s criminal class that there is big money to be made engaging in large-scale, long-distance and well-organized trafficking of illicit tobacco, they wrote. “Our research, conducted over years and peer-reviewed by other scholars, shows a direct connection between high excise tax rates and smuggling. New York and California
market for cigarettes in the EU cost governments a total of 10 billion euros in lost tax revenues and was equivalent in size to the total legal cigarette sales in the U.K., Austria and Denmark combined. Compiled by KPMG, a global network of professional firms providing audit, tax and advisory services, the report said that overall illicit cigarette consumption levels remained stable compared to the previous year. However, the report found a more than 30 percent increase in counterfeit consumption—the largest amount recorded to date. “Beyond damaging government revenues, harming legitimate businesses— including our own—and fueling crime in local communities, the availability of cheap, unregulated cigarettes on the black market undermines efforts to reduce smoking prevalence and prevent
Among them: •
In Michigan, legislation has been introduced to hike the cigarette excise tax by $1.50. We anticipate a hike of this size to kick the state’s smuggling rate from just under 21 percent to 34.4 percent of the total market.
•
In Illinois, Governor Jay Pritzker had recommended a 32-cent increase per pack for cigarettes from its current $1.98. But since then, the Senate president, John Cullerton, proposed a $1 increase. Our estimates indicate that Gov. Pritzker’s tax increase would kick up smuggling from 17.2 percent of the market to 22.1 percent. $1 increase would increase the smuggling rate to 31.7 percent.
•
In Oregon, the current smuggling rate is relatively low at 4.4 percent, but that would leap under a $2 increase a pack (150-percent plus) in the cigarette tax rate to 38.4 percent of the total market.
•
Nebraska is in the throes of a tax reform debate now that could include a 36-cent increase in the state excise tax on cigarettes to $1. Doing so would take the state’s smuggling rate from nearly zero (0.67 percent outbound) to 6.9 percent.
•
In Rhode Island, Governor Gina Raimondo has included in her most recent budget proposal (released in January) a 25-cent increase in the cigarette excise tax to $4.50 per pack. This would raise the state’s smuggling rate from 31.2 percent to 38.1 percent.
The degree of cigarette tax evasion and avoidance in high-tax states is remarkable, said the study. “Smokers are obviously not lining up like cows to be milked or sheep to be sheared.” may lead the nation in packs of untaxed smokes, but they are far from alone. Other research shows that nationwide average noncompliance with cigarette tax laws is high. “That phenomenon, and other problems related to tax evasion and avoidance, will likely only get worse as states like Michigan, Oregon, Rhode Island and others continue to go to the cigarette excise tax well.” The solution? “Instead of continuing to hike taxes, officials in high cigarette excise tax states ought to consider lowering them to narrow the gap between their states and lower-taxed ones,” said Nesbit, Lucci and LaFaive. Enormous Cost of Black Market Another new report on illicit tobacco trade—this one limited to the European Union—reveals that in 2018, the black
youth from smoking,” said Alvise Giustiniani, vice president illicit trade prevention for PMI, which commissioned the report. “For PMI to have impact in our drive to unsmoke the world, we must sustain our combined efforts to eliminate illicit cigarette trade, while ensuring responsible access to better alternatives for the men and women who would otherwise continue to smoke.” The report estimated that in 2018, illicit cigarette consumption—i.e., the consumption of counterfeit and contraband cigarettes—in the E.U. was at 8.6 percent of total consumption, representing 43.6 billion cigarettes. How Excise Tax Increases Could Affect Individual American States The Mackinac study included estimates of the impact that proposed cigarette excise tax hikes will have on smuggling.
18 TOBACCO INTERNATIONAL JUNE 2019
“Unlike the first ‘what-if ’ scenarios above, we expect Rhode Island to experience a net revenue loss from this tax hike of approximately $5.9 million as a direct result of tax evasion and avoidance,” wrote Nesbit, Lucci and LaFaive.
BUILDING ON THE PAST TO GROW A BRIGHT FUTURE For over 100 years, Universal Corporation has been finding innovative solutions to serve our customers and meet their leaf tobacco needs. We built a global presence, solidified long-term relationships with customers and suppliers, adapted to changing agricultural practices, embraced state of the art technology and emerged as the recognized industry leader. Today, we conduct business in over 30 countries on five continents, employ more than 20,000 permanent and seasonal workers, and are the leading global leaf supplier. Universal has a long history of operating with integrity, honesty, and a focus on quality. We are a vital link in the leaf tobacco supply chain, providing expertise in working with large numbers of farmers, efficiently selling various qualities of leaf to a broad global customer base, adapting to meet evolving customer needs, and delivering products that meet stringent quality and regulatory specifications. As we move into our next 100 years, we will build on our history by seeking opportunities to leverage both our assets and expertise. We will continue our commitment to leadership in setting industry standards, operating with transparency, providing products that are responsibly-sourced, and investing in and strengthening the communities where we operate.
www.universalcorp.com
Nigel Farage speaking at the 2015 Conservative Political Action Conference (CPAC) in National Harbor, Maryland.
20 TOBACCO INTERNATIONAL JUNE 2019
Photo: Gage Skidmore, CC BY 2.0
BREXIT
Could Brexit Lead to Britain’s First Pro-Smoking Prime Minister? All eyes are on Nigel Farage and his pro-smoking Brexit stance in the UK. By Bob Crew, TI London Correspondent ew politicians anywhere in Britain or Europe, or even in the World, have been more closely identified with the party they lead than Britain’s Brexit Party leader and founder, Nigel Farage. Much, if not most, of that party’s astonishing success thus far has been a product of the Farage brand, which is a straight-talking, Everyman image, grinning with a pint of beer or a cigarette (sometimes both) in hand. He is the first and only politician in modern times to identify himself as a cheerful pro-smoker and happy boozer also. His ‘man in the pub’ image and disdain for political correctness has left him free as a bird in flight to attack his rivals for being a bunch of mechanical and complacent stooges, clones and creeps who are all overly on-message. True to his image and his message as an outspoken saloon bar philosopher, smoking his head off much of the time, he has also got into plenty of political fights. But these are all scraps that he has won and not lost, emerging more than any other as the one who has got Britain out of the EU (go watch his videos on YouTube, brilliantly ridiculing and satirizing European MEPs in Brussels and walking rings round them). Also: Standing up to “World Health Organization bullies,” without, as yet, losing any votes on that account; opposing smoking bans in his beloved English pubs and beer gardens and reminding the British public that smokers are also voters who have their rights.
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Brexiteers Rights Also having rights are, of course, the 17 million voters who gave him and
Britain’s Leave Campaign the victory that it needed to get out of the European Union in the first place. Farage showed the way and lead the charge. As a result, Conservative Prime Minister Theresa May resigned, seen off by Farage and others similarly persuaded. seen off also by her own massive incompetence. Her predecessor Conservative Prime Minister David Cameron resigned before her when he lost his not so clever referendum to keep Britain in the EU, describing Farage back then as “a madeyed loon,” albeit not one who has not had his eye much more on the political ball than David Cameron.
in the millions, while Farage and his Brexiteers are winning them hands down. His party is now possibly on track to become the second largest in the UK soon, if not the largest. While Boris Johnson is the Conservative Party Brexiteer and favorite to succeed Prime Minister Theresa May, the real question is whether there will be any party left for him to lead after millions of Conservative voters have defected to other parties—including the Brexit Party, of course, and also the Lib-Dems—now that Theresa May has screwed up so badly. Farage has called her “the worst Prime Minister Britain has ever had,” and there are plenty of Conservatives who agree with him. While Boris Johnson and other Conservative Brexiteers have seen which way the Farage/Ukip/Brexit wind has been blowing—and joined it argu-
It is Farage who set the Brexit ball rolling in the UK with his Ukip fringe party more than two decades ago. It is Farage who set the Brexit ball rolling in the UK with his Ukip fringe party more than two decades ago. He has now turned into a mainstream Brexit Party that is chief ly all about him and his political style, and it is Farage who is now a powerful political force to be reckoned with in Britain and Europe. He is the pacesetter who has made it all happen. And do you know what? King-size smoker Farage and his Brexit Party are now in position in the UK to quite possibly win the next election. That might make Farage Britain’s first pro-smoking Prime Minister, now that the polls currently suggest that the mainstream parties—and the reigning Conservative Party in particular—are losing popularity and may be dead in the water and in danger of losing votes
ably for opportunistic reasons—Farage is the one solid man who has remained absolutely true to that cause and is regarded therefore as the most sincere Brexiteer of all. Line Forms to the Right For these reasons, all eyes are on Farage in the weeks and months ahead and his pro-smoking Brexit stance in the UK. If Farage comes out on top, Boris Johnson and the Conservative Party may be going cap in hand to him for a job, and who knows what others may have to get in line! But they will have to smoke a very big pipe of peace with him if they do: He is not looking for old-guard fellow travelers who have been snubbing and deriding him for a couple of decades already!
JUNE 2019 TOBACCO INTERNATIONAL
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JTI
JTI Makes Progress Toward Tobacco Sustainability The right choices contribute to sustainability, reduced environmental footprint and contribution to the community. From Staff Reports record of over 2.7 billion illegal cigarettes was seized thanks to information provided by JTI in 2018, a report from its parent company—Japan Tobacco—said in May. That was one of three main achievements that the report pointed to. The other two are that more than 30 percent of the electricity in JTI factories originated from renewable sources in 2018, and Human Rights Impact Assessments were completed by the company in five high-risk countries. “We ta ke the responsibilit y to manage our business sustainabili-
A
ty very seriously, and I am proud of the progress we are making globally,” says Suzanne Wise, JTI’s Senior Vice President Corporate Development. “We constantly challenge ourselves to make the right choices for our business’ long-term sustainability, to actively reduce our environmental footprint and positively contribute to the communities we are a part of.” The Price of Contraband Illegal trade is a growing problem, for these reasons, among many others: • It cheats legitimate tobacco companies and their brands,
22 TOBACCO INTERNATIONAL JUNE 2019
•
It cheats consumers who don’t know what they’re buying • It cheats governments who lose tax revenues. • It threatens wider society as organized crime networks involved in illegal tobacco trade are often also involved in human trafficking and terrorism. Tackling illegal trade is a key component of JTI’s approach to sustainability, and in 2018 the company provided 1,328 reports to law enforcement agencies, leading to the seizure of more than 2.7 billion illegal cigarettes and the raid of 39 counterfeit factories. At JTI’s factories around the world, the focus has been directed at minimizing the Company’s environmental impact. Following concerted efforts and investments, by the end of 2018, 31 percent of electricity was either purchased or generated from renewable sources. One example is the Philippines, where the largest self-consumption rooftop solar system in South-East
JTI’s factory in Batangas, Philippines, features the largest self-consumption rooftop solar system in South East Asia. It has 17,040 solar panels that convert the sun’s energy into electricity, preventing approximately 4,000 tons of GHG emissions a year.
JT’S GROUP-WIDE ENVIRONMENT PLAN SEEKS SUSTAINABILITY new environment plan, a key component of the JT Group’s commitment to conduct business in a sustainable manner, has been launched with the aim to achieve its new targets by 2030. The company focus areas and key targets are:
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Energy and Emissions: • Doubling the proportion of renewable electricity that we use to 25 percent by 2030 and 100 percent by 2050. • Reducing Greenhouse Gas (GHG) emissions from our own operations and emissions associated with our purchased goods and services by 32 percent and 23 percent, respectively. Natural Resources: •
Reducing water withdrawal associated with our tobacco business by 15 percent.
•
Replacing all wood from natural forests used in the tobacco curing process of our directly contracted growers with renewable fuel sources.
Waste: •
Reducing waste associated with our tobacco business by 20 percent. “We are looking forward to meeting this new plan’s objectives, which reflect
changes in our business, societal expectations, and growing scientific understanding of the environment,” said Chigusa Ogawa, Senior Vice President, Sustainability Management. “Our new targets go beyond our current plan and address a broader range of issues that affect not only our operations, but also key elements of our
Asia was installed, with 17,040 solar panels. A factory-by-factory feasibility review of opportunities associated with solar, hydro, wind, and biomass power has also been carried out–with the aim to achieve net zero carbon emissions in the longer term. In 2018, the JT Group also achieved Leadership status in CDP Climate Change for the third consecutive year and was selected as a member of the Dow Jones Sustainability Asia/Pacific Index for the fifth consecutive year. JTI systematically undertakes due diligence to identify and assess current and potential human rights risks throughout its value chain and aims to assess by 2025 all operations which are situated in ‘high-risk’ countries. Last year, the Company ran five Human Rights Impact Assessments in Tanzania, Mexico, the Dominican Republic, Myanmar and Malaysia, and consequently launched action plans to act on the findings and required im-
value chain. “We are particularly proud that our science-based GHG emission reduction target has recently been approved by the Science Based Targets initiative. We will track performance and progress toward our objectives and targets, and we will revisit the plan periodically to ensure that it remains relevant to our business and stakeholders.” The JT Group launched its first Group Environment Plan in 2014 to strengthen its approach towards reducing its environmental impact. In 2017, the initial target to reduce GHG emissions by 20 percent was already achieved and exceeded—three years ahead of schedule. “We are currently on track to achieve the other goals and commitments outlined in the Plan,” said Ogawa.
provements. This ongoing process aims to mitigate and prevent any adverse human rights impacts and ensure the highest standards of behavior are upheld within the business. New Targets “In the runup to 2030, and in line with the United Nations’ Sustainable Development Goals, the JT Group has committed to new sustainability targets, for which we will have a key role to
play in the coming years”, says Maarten Bevers, JTI’s Corporate Sustainability Vice President. “We are pleased with our solid achievements and have already started working towards reaching these newly launched targets.” The JT Group Sustainability report is compiled with reference to the principles of the Global Reporting Initiative (GRI), showing the JT Group’s commitment to being transparent in its sustainability performance.
JUNE 2019 TOBACCO INTERNATIONAL
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IMPERIAL BRANDS Left: Imperial launched Pulze— a new heated tobacco product—in a city pilot in Fukuoka, Japan. Bottom: myblu has been rolled out into major European markets, leveraging the company’s retail channels.
A Good Six Months for Imperial. What Lies Ahead? “Asset” brands and NGPs lead the way. From Staff Reports t is an article of faith that American states with higher excise taxes typically have higher rates of smuggling. Overall revenues at Imperial Brands are up 2.5 per cent for the six months ending March 31, with Europe and the Americas both growing revenue by 4 percent. “This has been another half of pleasing underlying tobacco performance enhanced by the growing contribution of our NGP business,” said Alison Cooper, the company’s Chief Executive. In tobacco, Imperial continues to focus on longstanding brand and market priorities, and they are delivering high margin sales growth, Cooper said. “Our Asset Brands continue to outperform and now repre-
I
sent two thirds of our revenue. There has been significant progress in building the company’s NGP business w ith investment behind myblu generating awareness and consumer adoption, resulting in leading
pers and retailers in a growing number of markets while the company continues to focus on building its presence on-line and in specialist vape stores, said Cooper. Increased investment in brand building and marketing activities are supporting consistent growth in sales to consumers particularly through traditional retail outlets NGP revenue was up by over 200 per cent to £148m driven by expansion in Europe, Japan and continued growth in the US, although we have seen a slowdown in the US where regulatory statements have tempered growth of the category. We continue to monitor regulatory developments in the US and will seek to mitigate any further potential impacts. “Our objective is to transition adult smokers to something better, and we continue to refine the approach we are taking based on learnings from market rollouts and deepening consumer insights,” she said.
There has been significant progress in building the company’s NGP business with investment behind myblu generating awareness and consumer adoption… retail shares in most markets. “We are building on this momentum in the second half focused on further omnichannel expansion and new product initiatives,” said Cooper. “We have set the foundations for accelerated revenue growth, and we are on track to meet our full year expectations.” Growing Sales of blu Strong growth in sales of myblu reflects the positive response from smokers, va-
24 TOBACCO INTERNATIONAL JUNE 2019
Building Distribution “We are building distribution to ensure blu is available where smokers go to buy tobacco which is increasing the importance of the retail channel in driving category growth.” The roll-out of myblu into major European markets has leveraged Imperial’s expertise in the retail and tobacconist channels, and it has rapidly expanded national distribution in Italy, France and Germany.
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IMPERIAL BRANDS Imperial recently expanded distribution into a further five regions. “We have substantial growth ambitions,” Cooper added. “[That is] reflected in our management incentives to deliver compound annual growth of 35–150 percent over the three years from 2017. This equates to a range of NGP revenues in 2020 of between £250 million and £1.5 billion.”
other nicotine assets in snus, oral nicotine, vapor and most recently in heated tobacco with the launch of Pulze,” said Cooper. “We continue to reshape our portfolio prioritizing our Growth and Specialist Brands to drive quality growth.” Together these brands form Imperial’s Asset Brands and account for 65.3 percent of tobacco net revenue, which was up 280 basis points on last year.
“In the UK, we have continued to focus on myblu, consistently growing consumer sales and educating retailers on pod-based devices.”
An Innovative Heated Tobacco Product Imperial added to its repertoire of NGP products with the heated tobacco product Pulze which has been launched in a city pilot in Fukuoka, Japan. “We have taken our time to understand what smokers want, which has informed the development of a high-quality device combined with our consumable ‘ID’ sticks, to deliver a more consistent and a uniquely personalized experience,” said Cooper.
“We are also leading in Spain where we are creating the category,” said Cooper. “In the UK, we have continued to focus on myblu, consistently growing consumer sales and educating retailers on pod-based devices.” In Japan, following the success of a zero-nicotine proposition in Fukuoka,
Consumers are using a broader repertoire of nicotine products than ever before, and Imperial is trying to shape category development through leading-edge innovation to meet evolving consumer preferences. “We have strong positions in cigarettes, fine-cut tobacco, papers and cigars and have also built a portfolio of
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COULD BREXIT MAKE HOW A CODING A SMOKER BRITAIN’S STATION APPROACH PRIME MINISTER? HELPS IN A TRACK & TRACE PROGRAM
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FACTORY FOCUS
Track & Trace Pack Program Enlists Coding Station Approach Program is specifically designed for conveyor-based OEM packers up to speeds of 500ppm. From Staff Reports he requirements for coding or printing directly onto cigarette packs has steadily increased over the past two decades. These increasingly complex requirements demand unique pack identification (or serialization) mean manufacturers need a solution that tackles the biggest coding challenge – handling of the packs. The Domino Coding Station is an affordable and compact solution for any cigarette manufacturer wishing to print serialized codes onto cigarette packs. A total of 18 have now been supplied to date, with all the ‘Big Four’ MNC’s being a customer. The Domino Coding Station is specifically designed for conveyor-based OEM packers up to speeds of 500ppm. It can handle either soft or hard pack formats. Soft packs are particularly challenging to code due to the limitations of the OEM packer design (these packers were designed many years ago, well before these coding requirements were identified).
T
The Coding Station is a bespoke ‘module’ allowing customers to take complete control of the pack coding process, in particular product handling, which is how the pack is presented for printing. It is the single biggest challenge when one is printing machine-readable codes, which is mandatory for any Track & Trace requirements. Handling the pack is the most critical part of the coding process— poor handling or product presentation will invariably lead to poor print quality. Quality Endangered If a product is not presented correctly for printing, the quality of the critical Machine-Readable Code (MRC) such as DataMatrix or DotCode, will be immediately impacted. MRC’s are particularly sensitive to handling issues due to the high degree of printing accuracy required. If packs are rejected at the point of coding for unacceptable print quality, or worse, if pack codes cannot be successfully read by automated vision
28 TOBACCO INTERNATIONAL JUNE 2019
when they are being aggregated further down the production lines, it will reduce production line efficiency. In summary, poor handling = poor code quality = reduced OEE. The Coding Station removes any risk associated with product handling, it ensures packs are correctly printed to the highest possible quality, it automatically checks codes for quality, it can reject packs, and it is far less intrusive than the traditional approach to ‘bolting’ equipment onto existing production lines. In acceptance testing on customer production lines, Domino has recorded OEE figures of 99.999 percent, proving that a pack coding solution can have almost zero impact on an existing production line efficiency. The key elements of the Domino Coding Station are: • Coding Station handling unit • Twin Domino D-Series i-Tech lasers • Domino Vision Control System (either Cognex or Omron) The Domino Coding Station minimizes the impact of integration on the existing production equipment. The approach Domino has taken with the Coding Station is identical to that seen in the pharmaceutical industry: A dedicated ‘module’ for coding, vision and reject that is literally a ‘drop-in’ to existing conveyor lines is the ultimate solution as it minimizes the impact on the rest of the production line. Tobacco differs as it is much faster (up to three or four times faster) and therefore adoption of laser technology for pack identification is now almost 100 percent. In pharmaceutical, Domino sees much more use of thermal ink-jet technology instead of laser, largely because of the differences in the application. As the maximum operating speed of the Domino Coding Station is 500ppm, the system is ideal for OEM packer model types such as GD X1, X500, X2, X3 or X3W.
Serialization Grows When Domino began supplying the Tobacco industry with coding technology, there was no requirement for serialization. It was simply batch or price information. In the past decade the requirement for serialization has continued to grow, it is now the majority of projects Domino deals with in the Tobacco industry. To enable Domino to offer the best solution for customers, specific new options were added to the Domino portfolio including integration parts, industrial vision and handling solutions. With ap-
be seen in alcohol, luxury goods and bottled water. In fact, any product. This legislation is largely driven by governments not only wanting to implement an anti-illicit trade policy, but also as a way to collect taxes on those products. Domino can also offer services to remove, supply and install new conveyor systems should they be required to facilitate a Domino Coding Station installation. The system is generally installed on the outfeed conveyor of the existing packer but can be installed on the infeed to the existing pack over wrap unit as well.
If packs are rejected at the point of coding for unacceptable print quality, or worse, if pack codes cannot be successfully read by automated vision when they are being aggregated further down the production lines, it will reduce production line efficiency. Poor handling = poor code quality = reduced OEE. proximately a 90 percent market share for cigarette pack identification applications globally, Domino products are perceived by their customers as being cost efficient, easy to install and operate and offering the highest levels of quality and reliability. There is increasing legislation that requires unique product identification of tobacco products. The largest of these projects is for the EU (Tobacco Products Directive or TPD2), but legislation requiring unique product identification (or Track & Trace) is being or has been implemented in markets such as Burkina Faso, Mexico, UAE, Russia, and most recently Saudi Arabia (KSA). With the ratification of the Anti-Illicit Trade protocol under the WHO Framework Convention on Tobacco Control, Track and Trace will rapidly become the global norm in tobacco. T&T legislation wonâ&#x20AC;&#x2122;t stop at tobacco. It will
Domino supplies coding equipment to any manufacturer who needs to identify its products with best before, sell by dates, batch codes and increasingly unique identification. Domino supplies a range of technologies including continuous ink-jet, Laser, print and apply labelling, thermal ink-jet and thermal transfer over-print. Domino was founded in 1978 in Cambridge, UK, and has been part of the Japanese Brother Group since 2015. With a dedicated Global support team solely focused on Tobacco operations, and a global network of over 120 distributors and subsidiaries, Domino supports tobacco customers in well over 50 countries. With the ratification of the Anti-Illicit Trade protocol under the WHO Framework Convention on Tobacco Control, Track and Trace will rapidly become the global norm in tobacco. JUNE 2019 TOBACCO INTERNATIONAL
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FACTORY FOCUS
A Low Oxygen Solution It pays to modify the atmosphere while controlling insects in stored tobacco. By Clive Gladman, Griffin Cardwell Limited A method of ter minating all stages of insect life while maintaining the quality of the tobacco is the goal of the solutions that Griffin Cardwell and Oxy-low bring to the tobacco market. The low oxygen solutions include a combination of machinery and packaging equipment for cut rag, DIET and lamina tobacco. The machines create a low oxygen environment inside the packaging by the use of nitrogen. Two different types of packing machines have been developed for different tobacco formats, which bring forward different advantages. The Oxytemp Packaging Unit is a full automated packaging system designed for lamina tobacco and uses the SMART Out-liner packaging. The Oxytemp places the tobacco boxes in a chamber, and oxygen levels inside the core of the product are rapidly reduced to below one percent by the use of the innovative pressure nitrogen application. There is an option to cool down the tobacco during the cycle. After the treatment cycle in the chamber has been completed, each tobacco box is placed in a SMART Out-liner and heat sealed to maintain the modified atmosphere inside the liner. The unit can be built in at the end of the GLT line or stands alone for product arrival in the warehouse. The machine capacity is designed to fit even the most challenging of customer volumes. The SFS Packaging Unit is a semi-automatic packaging machine for cut rag and DIET tobacco that comes together with the SMART In-liner packaging equipment. The operation starts by placing a SMART In-liner in the box after which it is filled with product. The box is then moved to the SFS Packaging Unit that creates low oxygen levels below one
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percent inside the SMART In-liner by flushing the liner containing the product with nitrogen. The unit closes and seals the packaging maintaining the modified atmosphere inside the SMART In-liner.
cially and environmentally responsibly. For both the Oxytemp and SFS you obtain effective non-toxic pest management, with a secure, high insect kill rate, usually greater than 99.97 percent. Low oxygen terminates all insects as no insect can become survive low oxygen. (Re) infestation is also prevented given the enclosed environment in which the tobacco is placed.
The key benefits are secure insect control, quality preservation, cost savings and in a wider sense acting socially and environmentally responsibly. Each SMART In- and Out-liner is a prefabricated bag to ease the process of placing it in- or outside of the box. The specially designed SMART liners are available in different sizes, among which are the standard C30 and C48 sizes. However, bespoke sizes can be made. The liner is gas tight as it has a multi-layer film structure including an oxygen barrier. All SMART liners can be collected for recycling. The Benefits There are real and significant savings during storage and transport that can be achieved using Modified Atmosphere Packaging. The key benefits are secure insect control, quality preservation, cost savings and in a wider sense acting so-
30 TOBACCO INTERNATIONAL JUNE 2019
Further, the quality of the tobacco is maintained as you protect the color and freshness of the product and halter the oxidation processes. This means that the shelf life of the tobacco is extended and the moisture and mass losses that naturally occur over time are minimized. For the Oxytemp one percent to two percent more lamina tobacco mass is retained during 9 to 12 months of storage when compared to conventional storage. A further cost saving is achieved by eliminating the â&#x20AC;&#x153;cool downâ&#x20AC;? area after the GLT process and the tobacco is directly available for further storage or transport. Besides the benefits for the tobacco itself, the risks for workers and the environment are also minimized, as no toxic fumigants are used.
COMPARING OTHER INSECT CONTROL METHODS BENEFITS
SMART LINER
PHOSPHINE FUMIGATION
COLD STORAGE
Insect control No beetle resistance Protection against re-infestation Long-term quality preservation Minimized mass, weight loss
Insect control Cheap fumigation method
Insect control No beetle resistance
SMART LINER
PHOSPHINE FUMIGATION
COLD STORAGE
High care handling
Beetle resistance Re-infestation Risk of polarization
Re-infestation High investment - CAPEX No long-term quality preservation Requires factory space
D I S A D VA N TA G E S
No long-term quality preservation
84th EDITION
2019 BUYERS’ GUIDE & GLOBAL DIRECTORY
ION EDIT
8 201 Y rd
83
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Exporters & Importers
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Supplies & Services
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Leaf Dealers, Growers & Processors 2/1/18
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Tobacco International
Buyers’Guide
& Global Directory
Enhance your listing by advertising in the 2020 Edition Tobacco International Buyers’ Guide and Global Directory is an essential reference tool for the tobacco industry and supplier companies all over the world. As an advertiser, you are guaranteed: • Year-Long Exposure • Worldwide Distribution
Albania – Bangladesh
Section 1: Global Directory Associations, Distribution/Importers & Exporters, Product Manufacturers, Leaf Dealers & Processors, Suppliers
ALBANIA Cigarette Manufacturer British American Tobacco Albania Tobacco and Cigarette Factory Stamles Product Manufacturer Tobacco and Cigarette Factory Stamles
ALGERIA Cigarette Manufacturer British American Tobacco Algeria
ANDORRA Cigar Manufacturer Franc Port, SA Cigarette Manufacturer Franc Port, SA JT International Tabandor SA Product Manufacturer Franc Port, SA Industries Montanya SA JT International Tabandor SA Smoking Tobacco Industries Montanya SA
ANGOLA
Product Manufacturer Massalin Particulares SA Philip Morris Nobleza Piccardo SAIC y F Smoking Tobacco Massalin Particulares SA Philip Morris Nobleza Piccardo SAIC y F
ARMENIA Cigarette Manufacturer British American Tobacco Armenia Grand Tobacco Co. Ltd SPS Cigaronne Co. Ltd Virginia Ltd Distribution/Product, Importer & Exporter Armenian Greek JV Masis Tobacco MV Co. Ltd Masis Tobacco Ltd Growing & Fermentation Masis Tobacco Ltd Leaf Dealer Armenian Greek JV Masis Tobacco MV Co. Ltd Masis Tobacco Ltd Product Manufacturer Armtabak d S C Grand Tobacco Co. Ltd SPS Cigaronne Co Ltd Virginia Ltd Smoking Tobacco
Consulting Knapp AG
XXXXXXX — XXXXXXX
Acetate Tow — Blending Machines XXXXXXX & Mixing — Plants XXXXXXX —XXXXXXX XXXXXXX
A
A complete directory to the world of allied products and services utilized by tobacco product manufacturers, leaf processors, and tobacco growers in the course of their business operations, organized alphabetically by product or service. Refer to Section 3 for complete contact information for the desired company. Refer to the Advertiser Index on page 144 to locate a supplier’s advertisement.
Product Manufacturer Knapp AG Research & Development Knapp AG Trierenberg Holding AG Supplier Altesse Berndorf Band GmbH Delfort Group AG Dr. Franz Fuerstein GmbH Folial GmbH Knapp AG Kukla Waagenfabrik GmbH & Co. KG Mayr-Melnhof Karton Mayr-Melnhof Packaging International/ International Tobacco Packaging MWV/A MeadWestvaco Resource Osterreichische Zigarettenfilter GmbH Poettinger Entsorgungstechnik GmbH & Co. KG Poettinger Water Disposal Technology S & S Vertriebs - GmbH Schiff + Stern KG Trierenberg Holding AG
AZERBAIJAN
AAF international americanair filter, P.O. Box 35690, Louisville, Kentucky 40232-5690, United States. Tel: +1 502 637 0011, Toll free +1 888 223 2003. Fax: +1 502 637 0321, Toll free +1 888 223 6500. Email: info@aafintl.com. Web: www.aafintl.com. Business Type: Suppliers. Products: Dust Collectors, Electronic Cigarettes, Electronic Cigarettes. Abal Hermanos SA, Paraguay 1780, Montevideo 11800, Uruguay. Tel: +598 2 924 0915. Fax: +598 2 924 1732. Web: www.pmintl.com. Business Type: Cigarette Manufacturers, Product Manufacturers.
Leaf Dealer Aucana Marketing GmbH Logistic Equipment Knapp AG
Section 3: Contact Information
Section 2: Supplies & Services, Machinery & Equipment
Distribution/Product, Importer & Exporter Top Brands Weswaldi International
Armtabak d S C Cigar Manufacturer Knapp AG ETA (Empresa dos Tabacos de Angola), SARL Supplier Armenian Greek JV Masis Tobacco MV Co. Ltd Cigarette Manufacturer Trierenberg Holding AG Wholesaler/Distribution British American Tobacco Angola Knapp AG AUSTRALIA rter ETA (Empresa dos Tabacos de Angola), SARL Association AZERBAIJAN Product Manufacturer Supplier Tobacco Cooperative of Victoria . Ltd ETA (Empresa dos Tabacos de Angola), SARL Cigarette Manufacturer Cigar Manufacturer British American Tobacco Azerbaijan Altesse Imperial Tobacco Australia Ltd ARGENTINA BAHAMAS Cigarette Manufacturer Association Berndorf BandBritish GmbH American Tobacco Australia Camera de Tabaco Cigar Manufacturer Philip Morris International (Australia) Ltd Graycliff Cigar Co. Cigarette Manufacturer Delfort Group AG Distribution/Product, Importer & Exporter British American Tobacco Argentina Product Manufacturer Swedish Match Australia Goloteca Manufactura Argentina de Tabacos Graycliff Cigar Co. Dr. Franz Fuerstein GmbH Massalin Particulares SA Logistic Equipment Philip Morris Conveying (Aust) Pty. Ltd BANGLADESH Nobleza Piccardo SAICFolial yF GmbH Industrial Product Manufacturer Cigarette Manufacturer Leaf Dealer American Tobacco Australia Abul Khair Leaf Tobacco Co. Ltd AG British Alliance One ArgentinaKnapp SA Philip Morris International (Australia) Ltd Bangladesh Tobacco Industries Ltd . Ltd Bonpland Leaf SA (BLASA) British American Tobacco Bangladesh Supplier Coop. de Salta Co. Ltd Kukla Waagenfabrik GmbH & Co. KGB.A.T. Anzpac Services (Australia) Pty. Ltd Cooperativa de Tabacalera de Tucuman Ltda Husna Tobacco Pvt. Ltd FlexLink Systems Pt. Ltd Cooperativa de Tabacaleros de Corrientes Ltda Nasir Leaf Tobacco Industries, Ltd Industrial Conveying (Aust) Pty. Ltd Mayr-Melnhof Karton Cooperativa de Tabacaleros de Jujuy Ltda Innovia Films (Asia-Pacific) Pty. Ltd Distribution/Product, Importer & Exporter Cooperativa Tabacalera de Misiones Ltda Kamra International Pty. Ltd Abul Khair Leaf Tobacco Co. Ltd J. Felipe Ottaviano y Cia. SA Mayr-Melnhof Packaging International/ RothTech Pty. Ltd Nasir Leaf Tobacco Industries, Ltd Universal Leaf Tabacos SA Treofan Australia Pty. Ltd Leaf Dealer International Tobacco Packaging Abul Leaf Processer Khair Leaf Tobacco Co. Ltd Cooperativa de Tabacaleros de Jujuy Ltda AUSTRIA Bangladesh Leaf Tobacco Co. Ltd MWV/A MeadWestvaco Pipe Smoking Tobacco British American Tobacco Bangladesh Cigarette Manufacturer Resource Nobleza Piccardo SAIC y F B.A.T. Co. Ltd British American Tobacco Austria Osterreichische Zigarettenfilter GmbH Tobacco International Buyers’ Guide & Global Directory 2018 9 Advertisers appear in bold Poettinger Entsorgungstechnik GmbH & Co. KG Poettinger Water Disposal Technology S & S Vertriebs - GmbH Schiff + Stern KG Trierenberg Holding AG . Ltd Wholesaler/Distribution Knapp AG
Cigarette Manufacturer
• Multi-Platform Distribution • Digital Advertising
Acetate Tow see Filter Tow
Adhesive Applicators Fi-Tech, Inc. (United States) C.B. Kaymich & Co. Ltd. (United Kingdom) PAK-TEC, Inc. (United States) SPI Developments Ltd. (United Kingdom)
Vintero Corporation (United States)
Adhesives Baumer hhs GmbH (Germany) Eastern Company S.A.E (Egypt) Edelstein Industries Inc. (Canada) FORBO-Swift Adhesives Ltd. (England) Forbo Swift Adhesives Ltd. (United Kingdom) Haynes Rubber & Supply Co., Lewis-Goetz (United States) H.B. Fuller Co. (United States) H.B. Fuller GmbH (Germany) Henkel & Cie AG (Switzerland) Henkel KG (Germany) Hitkari Trading Corporation (India) KneX Worldwide (United States) Mena Company for Adhesives Technology “Menatec” (Egypt) National Starch & Chemical GmbH (Germany) National Starch & Chemical Co. (United States) National Starch & Chemical Ltd. (United Kingdom) Pafra Systems Ltd. (United Kingdom) PAK-TEC, Inc. (United States) PJM Pujadas SA (Spain) Siag Chemicals Co. SAE (Egypt) STI Petofi Nyomda Kft. (Hungary) Titan Adhesives Co., Inc. (United States) Tuermerleim GmbH (Germany) Tutunski Kombinat A.D. Prilep - TKP (Macedonia) Upaco Adhesives Inc. (United States)
Acetate Tow see Filter Tow
Mechanical Transplanter (United States) Muller Vinosafe SAS (France) Opico (United States) Powell Manufacturing Co., Inc. (United States) Taylor Manufacturing, Inc. (United States)
Balers
Air Filters
Band Tobacco
Csonka Worldwide (United States) Hauni Maschinenbau AG (Germany) Renold, Inc. (United States) Tholander Ablufttechnik GmbH (Germany) Tornex Inc. (Japan) United Air Specialists, Inc. (United States) Up-To-Date Environmental Engineering AG (Switzerland)
see Homogenized Tobacco
Aluminum Foil BMJ (Indonesia) ColourPackaging Ltd. (Kenya) Eastern Company S.A.E (Egypt) Edelstein Industries Inc. (Canada) KneX Worldwide (United States) Novelis Deutschland GmbH (Germany)
Aluminum Foil Paper/ Board Rotogravure Printing AL INVEST Bridlicna, AS (Czech Republic) Aluprint S. de R.L. de C.V. (Mexico) Big Beard Co., Ltd. (China) Big Beard Co. Ltd. (China) IBI Corp. (South Korea) Mudanjiang Hengfeng Paper Co., Ltd. (China) New Toyo Aluminum Paper Product Co. (Singapore) Novelis UK Ltd. (United Kingdom) Parkside Flexibles (Normanton) Ltd. (United Kingdom) PT Tunas Alfin (Indonesia) Symetal SA (Greece) Vaassen Flexible Packaging BV (Netherlands)
Apron Machinery
Adhesive Applicators
Agricultural Chemicals
Diamond Metal Screens Pvt. Ltd. (India) Evans-MacTavish-Agricraft, Inc. (United States) Godioli & Bellanti SpA (Italy)
Fi-Tech, Inc. (United States) Sargent’s Sons Division (United States) V.I.T. SA (Greece) C.B. Kaymich & Co.ApronLtd. Pins (United Kingdom) Diamond Metal Screens Pvt. Ltd. (India) PAK-TEC, Inc. (United States) Art Paper & Board Tervakosi Oy (Finland) SPI Developments Ltd. (United Kingdom)
AG Sales & Service (United States) Barrettine Environmental Health (United Kingdom) Casa Bernardo Ltda. (Brazil) Chemprene (United States) Chemtura AgroSolutions (Latin America) Cochran Corp. (United States) Fair Products, Inc. (United States) Fersol (Brazil) Lurgi GmbH (Germany) Sunzon International (United States) Unichema International (Germany) Yara North America, Inc. (United States)
Agricultural Equipment & Machinery AG Sales & Service (United States) Beltwide Inc. (United States) Carolina Soil do Brasil Ltda. (Brazil) de Cloet Ltd. (Canada) Farmquip (Pvt.) Ltd. (Zimbabwe) Kali Und Salz GmbH (Germany) Long Agribusiness (United States) Maquinas Binz Industria e Comercio Ltda. (Brazil)
International Baler Corp. (United States)
Baling Press see Presses (Balers)
Abdullah Khan Tobacco Corp., 3-28-15/1 Brundavin Gardens, Guntur, A. P. 522007, India. Tel: +91 863 2354 576. Fax: +91 863 2354 576. Email: abdulla_tobacco@yahoo.com. Personnel: Abdullah Khan, managing partner; Saamir Khan, export division. Business Type: Leaf Dealers.
Band Tobacco Machinery
Comas S pA (Italy) Garbuio Dickinson (United Kingdom) Godioli & Bellanti SpA (Italy) Griffin Cardwell Ltd. (England) Griffin & Co. Inc. (United States) Hauni Maschinenbau AG (Germany) International Tobacco Machinery BV (Netherlands) Koehl Tobacco GmbH (Germany) Kunming Shipbuilding Equipment Co. Ltd. (China) The LTL Group (United Kingdom) Muzer Makina San. ve Tic. Ltd. Sti. (Turkey)
ABN Amro Bank, Herengracht 595, Amsterdam 1000 AB, Netherlands. Tel: +31 20 628 6365. Fax: +31 20 628 7697. Business Type: Suppliers.
see Homogenized Tobacco Making Machinery
Bandaroling Machines emkon. (Germany) Focke & Co. (GmbH & Co. KG) (Germany) Hauni Maschinenbau AG (Germany)
Abul Khair Leaf Tobacco Co. Ltd., D.T. Road, Pahartali, Chittagong 4000, Bangladesh. Tel: +880 31 714561 4. Fax: +880 31 710051/720239. Email: tobacco@abulkhairgroup. com. Web: www.abulkhairtobacco.com. Business Type: Cigarette Manufacturers, Distribution/Product, Importers & Exporters, Leaf Dealers.
Banding Machines C.A.T. d. Corsini G&C SpA (Italy)
Base Paper
Accumen Technology, Watermeadow House, Watermeadow, Chesham, Bucks HP51LF, United Kingdom. Tel: +44 1 494 79 4633. Fax: +44 1 494 794 644. Personnel: Colin Bunting, marketing director; Frank Daugherty, sales director; John Evason, technical director. Business Type: Suppliers. Products: Weight Control Equipment.
BMJ (Indonesia) Dr. Franz Fuerstein GmbH (Austria) Mudanjiang Hengfeng Paper Co., Ltd. (China) Tervakosi Oy (Finland)
Beedies Soex India Pvt. Ltd (India) Sopariwala Exports Pvt. Ltd (India)
Belt Fasteners
Mechanic Muller Vin Opico (Un Powell Ma Taylor Ma
Ammeraal Beltech Holding BV (Netherlands) Ammeraal Beltech Inc. (United States) Flexco (United States) Forbo Siegling, LLC (United States) Haynes Rubber & Supply Co., Lewis-Goetz (United States) Jerry Brothers Industries, Inc. (United States) Mcleod Belting Co., Inc. (United States) Piedmont Belting Co. (United States) Sparks Belting Co. (United States) Ton-Tex Corp. (United States)
Belts & Belting Agency for Dematic Corp. (United States) Ammeraal Beltech GmbH (Germany) Ammeraal Beltech Holding BV (Netherlands) Esbelt SA (Spain) Malcam (Israel) Max Schlatterer GmbH & Co. KG (Germany) Sampla Belting S.P.A. (Italy) Verseidag Beltech Group (Germany)
Bale Slicers
Vintero Corporation (United States)
Adhesives
ABC Tobacco, Higienopolis 1601, Eurocenter sala 1203, Londrina 86015 010, Brazil. Tel: +55 43 3336 3300. Fax: +55 43 3339 5001. Email: contact@abctobacco.com. Web: www. abctobacco.com. Personnel: Camila Silva; Maroun Khouri.
Blended Cut Tobacco
Air Filter Csonka W Hauni Mas Renold, In Tholander Tornex Inc United Air 2018 Up-To-Da 39
A. Asbjornsens Tobaksfabrik AS (Norway) Fumarole (Pvt.) Ltd. (Zimbabwe) Independent Leaf Tobacco Company, Inc. (United States) Tobacco Products International FZ-LLC (United Arab Emirates) Top Tobacco International, Inc. (United States)
Blending Machines & Mixing Plants Ets. Joseph Cruanas (France) Franz Sagemüller GmbH (Germany) Godioli & Bellanti SpA (Italy) Griffin & Co. Inc. (United States)
Baumer hhs GmbH (Germany) T b I t ti l B ’ G id & Gl b l Di Eastern Company S.A.E (Egypt) Edelstein Industries Inc. (Canada) FORBO-Swift Adhesives Ltd. (England) Forbo Swift Adhesives Ltd. (United Kingdom) Haynes Rubber & Supply Co., Lewis-Goetz (United States) H.B. Fuller Co. (United States) H.B. Fuller GmbH (Germany) Henkel & Cie AG (Switzerland) Henkel KG (Germany) Hitkari Trading Corporation (India)
t
Fax: +66 2 237 6111. Email: info@adamsint.com. Web: www. adamsint.com. Personnel: Allen Tucker, director; Karl Kunz; Sunchal Chongsuknlrandr, director; Rao Somesh, Director; Altemir Wollmann, Director; Arjaree Yatirukpien, director; Wing F Chung, managing director; Henrik Baark, Director; Prem Thoonkapbalin, director. Business Type: Leaf Dealers. Offices: F + K.Factory:, 174 Jangsanit Rd., Ban Phai, Khon Kaen 40110, Thailand. Tel: +66 43 272 372/073. Fax: +66 43 272 370.
Pahartali, 4561 4. Fax: ulkhairgroup. ess Type: Importers &
Watermeadow, : +44 1 494 Colin Bunting, ector; e: Suppliers.
Aluminu AL INVEST
Admiral Electronic Cigarettes, 7020 Hayvenhurst Avenue, Suite A, Van Nuys, California 91406, United States. Tel: (818) 9889568. Business Type: Suppliers. Products: Electronic Cigarettes. Adolfo Pfeiffer SA, cl. Velazquez 136, 28006, Madrid 28006, Spain. Tel: +34 91 562 98 04. Fax: +34 91 561 21 88. Email: adolfo.pfeiffer.sa@auna.com. Personnel: Adolfo Pfeiffer Seghers, managing director. Business Type: Leaf Dealers. Aegean Tobacco Exporters Association, Ataturk Cad. No: 382, Alsancak, Izmir 35220, Turkey. Tel: +90 232 463 69 50. Fax: +90 232 463 39 41. Email: eib1@egebirlik.org.tr. Web: www.egebirlik.org.tr. Personnel: Sezmen Alper, sec. General; Tahir Kanlikuyu, department manager. Business Type: Associations. AER Premium Electronic Cigarettes, 5130 Avenida Encinas, Carlsbad, California 92008, United States. Tel: (800) 570-6350. Business Type: Suppliers. Products: Electronic Cigarettes. AET Films, 15 Read’s Way, New Castle, DE 19720, United States. Tel: +1 302 326 5500. Fax: +1 302 326 5501. Email: info@aetinc.com. Web: www.aetfilms.com. Personnel: Bill Swain; Denis Alexander; James R. Rich; Ronald N. Rodeck. Business Type: Suppliers. Products: Film (Polypropylene). AET Sales, 4601 Olde Forest Drive, Greenboro, North Carolina 27406, United States. Tel: +1 336 674 0100. Business Type: Suppliers.
AA Agrisense BCS Ltd., Unit 1, Taff Mead Rd., Treforest Industrial Estate, Pontypridd, Mid Glamorgan CF375SU, United Kingdom. Tel: +44 1443 841 155. Fax: +44 1443 841 152. Business Type: Suppliers. Products: Fumigation Equipment & Systems, Pesticides, Product Security. Agritab SRL, 11 Berzei, Sector 1, Bucharest 70759, Romania. Tel: +40 1 3121 074. Fax: +40 1 3121 074. Personnel: D. Ionescu, chairman & c.e.o. Business Type: Leaf Dealers. Agrotab, Monte da Barca, P.O. Box 53, 2104-909 Coruche, Portugal. Tel: +351 243 610 700. Fax: +351 243 610 798. Email: agrotab@pmintl.com. Personnel: Jose` Lourinho, director; Carlos Santiago, president. Business Type: Leaf Dealers. A. Habeebur Rahman Sons, # 4/5 (New #28), Jamalia Nagar, Perambur High Road, Chennai, T.N. 600 012, India. Tel: +91 44 2662 3676/2662 2636. Fax: +91 44 2662 5045. Email: info@ sbidis.com. Web: www.sbidis.com. Personnel: A. Uvais Ahmed, director; A. Mohamed Ashraf, director. Business Type: Cigarette Manufacturers, Product Manufacturers, Smoking Tobacco. Ahlstrom/Labelpack Division, 6, Rue de Rome, Rosny-sousBois Cedex F 93561, France. Tel: +33 1 4935 40 40. Email: labelpack@ahlstrom.com. Web: www.ahlstrom.com/lp. Ahmed & Sons, B-53 Willayatabad Manghopir Road, Karachi 75700, Pakistan. Tel: 0092 213 2577026. Fax: 0092 213 2572516. Email: info@ahmedsons.us. Web: http://www. ahmedsons.us. Business Type: Suppliers. Products: Garniture Tapes, Suction Tapes. Aiger Engineering Ltd., P.O. Box 77, 246 Vasillevski St., Plovdiv BG-4003, Bulgaria. Tel: +359 32 905001. Fax: +359 32 947001. Email: sales@aiger.com. Web: www. aiger.com. Personnel: Simon Strothers, group sales and marketing director; Dimitar Yanchev, general manager; Michael Houldsworth, Director Aiger UK. Ltd. Business Type: Suppliers. Products: Carton Boxing/Forming Machinery, Cigarette Filter Tip Machines, Cigarette Making Machinery, Cigarette Tax Stamping Machines, Cutters & Cutting Machines, Packaging Machinery, Rebuilt Machinery Materials-Non Tobacco, Spare Parts, Wrapping Machines. Office: Aiger Group AG. Tel: +41 41 7267873. Email: office@hqgroup.aiger.com. Aiger USA LLC. Tel: +1 412 616 2833. Fax: +1 412 251 0466. Email: sales@ usa.aiger.com. Aiger Far East Ltd. Tel: +65 9272 2203. Email: kevin.ang@aiger.com. Aiger UK Ltd. Tel: +44 (0) 121 230 1768. Email: sales@aiger.com.
Africaleaf (Malawi) Ltd., Plot 29/173B Alimaunde, P.O. 3300. Fax: +55 Box 40012, Kanengo, Lilongwe 4, Malawi. Tel: +265 1 710 914. Fax: +265 1 712 417. Email: leaf@africaleaf.com. Web: Aegean Tobacco Exporters Association, Ataturk Cad. No: m. Web: www. www.tribac.com. Personnel: A.C. Masi, shipping director; R.I. Glenn, director (alternate); S.A. Marshall, finance director; Ace Interactive Ltd., Unit 3, 94 Charlton Road, Andover, 382, Alsancak, Izmir Turkey. M. Gange Harris, leaf35220, director; C.D. Le Patourel, managing Tel: +90 232 463 69 oun Khouri. Hants SP10 3JZ, United Kingdom. Tel: +44 1264 350 424. director. Business Type: Leaf Dealers. Fax: +44 1264 356 281. Email: sales@ace-interactive.com. 50. Fax: 232C.P.463 39de Castilhos 41. 1021/31, Email: Web: www.ace-interactive.com. Personnel: Barry austin,+90 Afubra, 1021, Rua Julio Santa eib1@egebirlik.org.tr. operations director; Keith Tarrant, quality manager; Michael Cruz do Sul, RS 96800, Brazil. Tel: +55 51 371 13244. undavinCole, managing director. Business Type: Suppliers. Business Type: Associations. Web: www.egebirlik.org.tr. Personnel: Sezmen Alper, sec. Products: Classifying Equipment, Grinding Wheels, Knives, Airco DIET, 110 Allen Rd., Liberty Corner 07938, United AG Sales & Service, 1185 Pineridge Rd., Norfolk, VA 23502, Metal Detectors, Spare Parts. 863 2354 576. States. Tel: +1 908 626 2700. Fax: +1 908 626 9650. Email: United States. Tel: +1 757 855 0191. Fax: +1 757 855 4155. manager. Business General; Tahir Kanlikuyu, department aircodiet@aircodiet.com. Personnel: M. Auerbach, president; Ackerman and Baynes LLC., 4211-15 Erdman Ave., Business Type: Suppliers. Products: Agricultural Chemicals, K. Laigaard, projects director. Business Type: Suppliers. co@yahoo.com. Baltimore, MD 21213-2698, United States. Tel: +1 410 342 Agricultural Equipment & Machinery, Fertilizers, Tear Tapes. Products: Expanded Tobacco, Tobacco Expansion Systems Type: Associations. 2216. Fax: +1 410 563 3971. Email: matt.smith@ackbay. (CRS), Tobacco Expansion Systems (DIET), Tobacco Expansion Agency for Dematic Corp., 507 Plymouth Avenue, N.E., com. Web: www.ackbay.com. Personnel: Matthew Smith, Saamir Khan, Systems Machinery. Grand Rapids 49505-6029, United States. Tel: +1 616 913 Sales. Business Type: Suppliers. Products: Drying Machinery, 7700. Fax: +1 616 913 7701. Email: usinfo@dematic.com. Feeders, Rotary Dryers, Spare Parts. Airco DIET AS, Snaremosevej 27, Fredericia 7000, Denmark. AER PremiumWeb:Electronic Cigarettes, www.dematic.com. Business Type: Suppliers. Products:5130 Tel: +45 Avenida 76201530. Fax: +45 76201531. Email: aircodiet@ Adamantine Precision Tools Ltd., 501 Research Rd., Belts & Belting, Conveyor Systems, Packaging Machinery, aircodiet.com. Web: www.aircodiet.com. Personnel: Asbjorn Richmond 23236-3090, United States. Tel: +1 804 794 9615. Storage Warehousing. Schwert, managing director; Kel Laigaard, director. Business Encinas,Business Carlsbad, California 92008, United States. Tel: (800) Fax: +1 804 794 9514. Email: sales@Fi-Tech.com. Type: Suppliers. Products: Processing Machinery. Agio Cigars, Wolverstraat 3, 5525 AR Duizel, Netherlands. Suppliers. Products: Grinders, Grinding Wheels, Knife m 1000Type: AB, Tel: +31 497 58 25 00. Fax: +31Suppliers. 497 51 64 06. Email: info@ Grinders & Sharpeners, Spare Parts. Air-cured Tobacco Assn., P.O. Box 1979, BMZ Tobacco 570-6350. Business Type: Products: Electronic agiocigars.nl. Web: www.agiocigars.com. Business Type: Auction Floors, Willowvale, Harare, Zimbabwe. Tel: +263 4 20 628 Adams 7697. International Ltd., 5/26-29 Saladang Road, Silom, Cigar Manufacturers, Product Manufacturers. 621 331 4. Fax: +263 4 614 489. Email: acta@africaonline. Cigarettes. Bangrak, Bangkok 10500, Thailand. Tel: +66 2 233 9818. co.zw. Business Type: Associations. Agricultural Development & Marketing Corp., P.O. Box
Aluminu BMJ (Ind ColourPac Eastern Co Edelstein KneX Wor Novelis De
AD DIMON Gorica, Industriska Bb, Vinica, Macedonia. Tel: +389 33 360 832. Fax: +389 33 360 832. Personnel: Simon Green, regional director Europe (based in UK); Arie Maan, Jr., country manager. Business Type: Leaf Dealers. Office: DIMON MD AD, 11 Nov Belgrad, Kavardarci, Macedonia. Tel: +389 43 414 603. Fax: +389 43 414 605.
Andover
3052, Limbe, Malawi. Tel: +265 64 00 44. Fax: +265 64 04 86. Personnel: B.D. Kandeya, tobacco marketing manager;
Akay Filtips, 21/24B Nariman Bhawan, 227 Nariman Point, Mumbai 400021, India. Tel: +91 22 2043583. Personnel: Ajit
F.A.Read’s Jumbe, g.m.; A.M.B. KythembaNew Mwale, asst.Castle, g.m. BusiV. Shah. 19720, Business Type: Suppliers. Products: Filters. AET Films, 15ness Way, DE United Type: Associations, Leaf Dealers. Akiki’s SARL, Nahr Ibrahim Akiki Bldg., Jounieh 1899, Registered Office: Post Box 15, Mangalagiri Lebanon.326 Tel: +9615501. 9 440739. Fax:Email: +961 9 901934. Email: States. Tel: +1Agrimmcor 302Ltd.,326 5500. Fax: +1 302 takiki@akikis.com. Web: www.akikis.com. Personnel: T C Rd., Guntur, A. P. 522001, India. Tel: +91 863 222 261. Akiki, director; Y Akiki, director. Business Type: Cigar ManuFax: +91 863 356701. Personnel: B.V.S. Raju, executive. info@aetinc.com. Web: www.aetfilms.com. Bill facturers,Personnel: Cigarillo Makers, Product Manufacturers. Business Type: Leaf Dealers. Swain; Denis Alexander; James R. Rich; Ronald N. Rodeck. Tobacco International Buyers’ Guide & Global Directory 2018 79 Business Type: Suppliers. Products: Film (Polypropylene).
AET Sales, 4601 Olde Forest Drive, Greenboro, North Carolina 27406, United States. Tel: +1 336 674 0100. Business Type: Suppliers. Africaleaf (Malawi) Ltd., Plot 29/173B Alimaunde, P.O. Box 40012, Kanengo, Lilongwe 4, Malawi. Tel: +265 1 710 914. Fax: +265 1 712 417. Email: leaf@africaleaf.com. Web: www.tribac.com. Personnel: A.C. Masi, shipping director; R.I. Glenn, director (alternate); S.A. Marshall, finance director;
Peramb 2662 3 sbidis.c directo Manufa Ahlstr Bois C labelpa Ahmed 75700 25725 ahmed Tapes, Aiger Plovdiv Fax: + aiger.c marke Michae Suppli Cigare Machin Cutting Materi Office:
www.tobaccointernational.com • sales@tobaccointernational.com
LEAF NEWS UNITED STATES A Good Start For 2019 By mid June, planting of the f lue-cured crop was nearing completion. Growers in Florida, Georgia and South Carolina were finished with setting and had begun topping, and North Carolina growers expected to finish by the fifteenth. Virginia f lue growers had about a tenth of their acreage to go as of June 10. Burley transplanting was not as far along. In the leading state, 66 percent or the crop (including dark types), had been set in the field, while in Tennessee, the number two state, 63 percent (again including dark) had been planted. Much of the flue-cured belt had suffered a hot dry spell in May, but it began raining for most in the last week of the month, culminating in some torrential storms in early June that lead to some drowning and washing. But as a whole, the crop was doing well in mid June. In Kentucky, farmers continued to battle persistent rain, planting when they could. There were a few days of dry weather in the first week of June, allowing progress. But rain moved back in towards the end of the week. A flue-cured tobacco grower in Florida (U.S.) uses a mechanical topper to remove the flowery tops from his plants in late May.
NAMIBIA Joint Leaf Venture Gets Government Green Light KATIMA MULILO—A
proposed 10,000-hectare tobacco-producing operation near Katima Mulilo in northeast Namibia has taken another regulatory step toward coming into existence, but not without objections from its detractors. Namibia Oriental Tobacco, a joint Namibian/Chinese venture, obtained government approval in mid June for clearing land for the leaf facility, which will be located in the Zambezi Region of the country and will produce tobacco and maize which will be grown in rotation. Further clearances are still required. The tobacco will be 100 percent exported. The land is to be awarded a 99-
year—lease on the property, according to press reports. One Namibian critic said the decision to award land to the Chinese is not just when Namibians seriously need land and that the country’s most fertile land is used to produce drugs and not food. “To allocate more land for tobacco than is allocated for food production is a deviation from the policy direction taken by the Namibian government through its agriculture ministry,” said Job Amupanda, leader of the youth activists, a Namibian politician and academician. The Minister of Health and Social Services, Dr. Richard Kamwi, objected that the project cut Namibian lives short. “It is very unfortunate that we
32 TOBACCO INTERNATIONAL JUNE 2019
just introduced [a] law [and] put it in practice last year July to stop smoking…but now we are planting tobacco,” he said. The Chinese Ambassador to Namibia, Xin Shunkang, insisted that the project will be beneficial to the Namibian economy as a similar project in neighboring Zimbabwe has produced good effects for that economy, according to the NAMPA news agency. “Zimbabwe’s tobacco quality is very good, and [the growers] have earned a lot of money through it,” said Zin. “So, I have suggested that Chinese companies teach Namibian farmers how to plant tobacco, for them to also earn money through this.” He added, “I want to clarify that the tobacco produced here will not be
sold or used in Namibia. Once there is a plantation and after the processing, it will be moved to the Chinese market.” One outlet suggested that a workforce of 3,000 individuals would be employed. Clearing forest land will be required. It is believed that little if any of the land involved is currently clear.
PARAGUAY Excellent Quality, But Washed-Out Leaf ASUNCION—Very
irregular weather has affected the Criollo crop considerably, according to an April report from the Hail & Cotton leaf group. Long periods of drought were followed by weeks of uninterrupted rainfall, provoking both excellent tobacco quality but also washed-out leaves. “We are now in the middle of the buying season and all is developing normally,” it said. “Estimated total green production is similar to last year (1.800 tons) and, hopefully, there will be no tobacco left unsold with the farmers.” A campaign to persuade growers to use selected seed instead of seed saved from their previous crops is enjoying some success. “Yield per hectare is increased by 20 to 30 percent, generating high demand among tobacco growers. Leaf size has been increased but has maintained original Criollo characteristics and properties.”
ZIMBABWE Leaf Market Still in the Doldrums HARARE—The
tobacco market here simply could not shake the price-depressing effect of weak world demand conditions and leaf quality that apparently doesn’t appeal to buyers. Through June 11, the 56th day of sales, the average price for tobacco here (all flue-cured) was US$1.86 per ki-
ESTIMATED LEAF PRODUCTION BY CROP YEAR UNIVERSAL GROUP ESTIMATES — MILLION GREEN KGS, AS OF MAY 22, 2019
FLUE-CURED North & Central America; Caribbean USA South America Brazil Europe + CIS Africa + Middle East Asia + Oceania PRC
2015 226 204 665 570 130 416 2,833 2,248
2016 218 195 542 460 131 360 2,620 2,108
2017 220 194 711 620 135 371 2,400 1,883
2018 160 135 652 570 127 414 2,275 1,750
2019* 162 136 690 600 128 429 2,299 1,750
World Total World Total Excluding PRC
4,270 2,022
3,871 1,763
3,837 1,955
3,628 1,878
3,708 1,958
BURLEY North & Central America; Caribbean USA South America Brazil Europe + CIS Africa + Middle East Asia + Oceania PRC
2015 89 64 125 80 38 272 120 8
2016 79 55 94 55 31 284 93 5
2017 93 65 127 75 30 164 97 5
2018 69 41 113 65 27 279 100 5
2019* 72 45 117 70 29 277 102 5
World Total
644
580
511
587
596
ORIENTAL
2014
2015
2016
2017
2018
World Total
202
179
171
188
166
DARK AIR-CURED
2015
2016
2017
2018
2019*
World Total All Tobacco Types World Total
122 2015 5,833
106 2016 5,329
117 2017 5,260
119 2018 5,126
121 2019* 5,202
*Estimated. The data are Universal Group’s estimates of production in selected tobacco origins and of world production and also suggest what production levels could be for the upcoming crop. Totals may differ from the sum of the numbers in each column due to rounding. The report is primarily based on market assessments by the worldwide Universal Group, and may also include estimates available through various trade sources, which may not always be reliable. Important factors could affect current expectations for any one market, including political and economic events as well as weather conditions.
logram. At the same point in sales in 2018, price had been a dollar higher at US$2.91 per kilogram. Adding to the growers’ distress, it was clear that the crop was short: 167.2 million pounds had been purchased by June 11, compared to 189.6 million pounds—nearly 12 percent less—at the same point in 2018 sales. But industry leaders still bore some hope, perhaps unrealistically, that pro-
duction might yet reach the preseason target of 220 million kilograms. Zimbabwe Tobacco Association chief executive Rodney Ambrose told Zimbabwean media that despite the challenges, he believed the was still attainable. “We still have at least one and half months to complete selling,” he pointed out in mid June. In 2018, production was 252 million kilograms, a record.
JUNE 2019 TOBACCO INTERNATIONAL
33
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HOW JTI IS MAKING PROGRESS TOWARD TOBACCO SUSTAINABILITY
COULD BREXIT MAKE HOW A CODING A SMOKER BRITAIN’S STATION APPROACH PRIME MINISTER? HELPS IN A TRACK & TRACE PROGRAM
A JOINT LEAF VENTURE IS ONE STEP CLOSER IN NAMIBIA
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ADVERTISER INDEX BMJ......................................................................... 4, 5
NDC .......................................................................... 14
Boegli-Gravures SA .................................................... C2
Star Agritech International ......................................... C3
delfort Group ...................................................... 7, 9, 11
SWM International ...................................................... C4
Domino ..................................................................... 26
TSAL Ltd. (Tobacco Solutions Asia Limited) ............... 25
Imperial Tobacco ......................................................... 3
U.S. Tobacco Cooperative, Inc. .................................. 17
Micro Laser Tech ....................................................... 29
Universal Leaf ............................................................ 19
34 TOBACCO INTERNATIONAL JUNE 2019
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