JTI Plans to Produce Ploom X in the US

Key points:

1.Senior executives at Japan Tobacco International (JTI) have revealed that, due to the impact of tariffs under the Trump administration and the trend of supply chain restructuring, JTI plans to manufacture its heated tobacco device Ploom X locally in the United States.

2.This plan will be implemented through a joint venture with Altria, with products currently being primarily manufactured in Indonesia.

3.The company has considered assembling in the United States in the future, but the condition is that Ploom's sales in the US see substantial growth.

4.JTI is expected to submit an application for authorization to sell Ploom X to the FDA in the middle of the year.

According to a report from Reuters on May 27, executives at Japan Tobacco International (JTI) have revealed that, due to the tariff policies of the Trump administration prompting some companies to reconsider their supply chains, JTI plans to produce Ploom heated tobacco devices in the United States.

JTI, a subsidiary of Japan Tobacco, manufactures Benson & Hedges and Winston cigarettes. The company plans to launch the Ploom X heated tobacco device in the United States through a joint venture with Altria, the maker of Marlboro.

The Ploom X tobacco sticks are produced in the United States using a heating tobacco device which reduces the generation of harmful chemicals without combustion.

Takehiko Tsutsui, Executive Vice President in charge of low-risk products at Japan Tobacco International, stated in an interview that most of these devices are manufactured in Indonesia, with components sourced from elsewhere.

After announcing the launch of the new generation Ploom in Japan, he mentioned, "We may consider assembling in the United States."

But this decision will need to be reassessed once Ploom has significant sales in the United States. He added that, until then, it may be necessary to look for other locations.

President Trump once threatened to impose a 32% tariff on imports from Indonesia, but the measure is currently suspended. Washington hopes that this comprehensive tariff policy will attract manufacturing facilities and job opportunities back to the U.S. JTI and Altria must obtain sales authorization from the FDA, a process that may take several years.

Tsutsui stated that the company plans to submit an FDA application for Ploom X in mid-2022.

In addition, JTI also sells its Logice-cigarette brand in the United States. Tsutsui revealed that these devices are produced in China and are affected by a 30% tariff. Due to the relatively small sales of Logic in the United States, the impact of the tariff on this brand is "very limited".

Firsts noticed that Japan Tobacco (JT) launched a new heated tobacco device, Ploom AURA, and dedicated tobacco stick, EVO, on May 27th. The device features the latest heating technology and supports Bluetooth connectivity; the EVO tobacco stick is positioned as a high-end premium brand and offers three flavors. JT plans to invest 650 billion yen to develop the RRP category, with the goal of capturing 10% market share in the HTS market by 2028.