JTI Continues to Operate Factories in Russia

Market
Mar.17.2023
Japan Tobacco International (JTI) had considered selling its Russian business during the Russia-Ukraine conflict in 2022, but now it will continue maintaining operations in Russia.
JTI Continues to Operate Factories in Russia

 

According to Russian media Krestyanskie Vedomosti, on March 13, Manabu Hirose, assistant director of Japan Tobacco (JTI), said that Japan Tobacco International (JTI) 's four factories would continue to work in Russia.

 

Two factories for finished products are operated in St. Petersburg and Rostov-on-Don, while the other two factories for tobacco-processing plants are located in Lipetsk and Leningrad regions.

 

Hirose said the factories operate in tense and complicated situations in Russia and Ukraine. According to him, the company continues to work in Russia and complies with all sanctions and regulations inside and outside the country.

 

"Currently, all our four factories operate in Russia; our local division JTI Russia employs 4,000 employees, including production and management," a company representative said.

 

The company sells Russian cigarette brands such as Donskoy Tabak and world-renowned brands Winston, LD, Mevius, Camel, Glamor, and Sobranie.

 

On March 10, 2022, the JTI Russia branch announced the suspension of new investments and additional marketing activities in Russia. A JTI spokesman has said that the company was considering various options for its Russian operations but could not comment on potential buyers for the stake. In 2021, the Russian market contributed approximately 8% of JTI Group's revenue and 15% of adjusted operating profit.

 

JTI products are sold in 130 countries. Japan Tobacco entered the Russian tobacco market in 1992. Over the past 20 years, JTI has invested more than $4.6 billion in Russia. Japan's finance ministry is JTI's largest shareholder, holding a one-third stake and providing the government with about $1 billion in dividend income each year.

 

Previously, to strengthen the crackdown on illegal tobacco, the Russian Ministry of Finance proposed imposing criminal responsibility for producing and selling tobacco products without a license. The representative of Japan Tobacco (JTI) in Russia has said, "We support the bills formulated by the Ministry of Finance."

 

Previously, PMI stated that it would not withdraw from the Russian market and would fight the Kremlin.

 

Reference:

Четыре фабрики японской компании сигарет JTI продолжают работу в РФ

 

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