JTI to Invest $80 Million in Tobacco Processing Facility in Kazakhstan

According to a report by Zakon.kz, Japan Tobacco International (JTI) is set to invest $80 million to establish a new tobacco processing facility in the Almaty region of Kazakhstan. JTI has been a significant investor in Kazakhstan's economy and ranks among the top ten taxpayers in the country. Over the past five years alone, JTI has contributed approximately KZT 530 billion in tax revenue to the nation.

This investment will lead to an approximately 20% increase in JTI's cigarette production capacity, while also providing new job opportunities for at least 100 individuals.

Philip Livingston, Senior Vice President of Global Supply Network at JTI, stated that JTI is steadily expanding its market share in Kazakhstan and globally. The modernization upgrade of the Almaty factory is of great importance to the entire region, as tobacco products from this area will be exported to Kyrgyzstan, Mongolia, Tajikistan, Armenia, Uzbekistan, and Turkey.

He stated, "The millions of investments we have made demonstrate our commitment to the market in Kazakhstan, where our market share now exceeds 42%. This allows us to strengthen our position as a cigarette manufacturer.

According to him, the new tobacco raw material processing line will enable the country to achieve self-sufficiency in cigarette production and expand the variety of exported products.

However, the primary issues presently plaguing the tobacco market are smuggling and counterfeit cigarettes.

Livingston stated, "This is a serious and growing issue that we approach from two perspectives. Firstly, it poses risks to the quality and health of our consumers. Secondly, it results in a loss of revenue for the country. It is estimated that Kazakhstan lost 63 million dollars last year. Therefore, we are providing training to representatives of government agencies and informing them on how to distinguish counterfeit products.

Victor Veklich, President of JTI Kazakhstan, Central Asia, and Mongolia, further explained that smuggling is the primary issue currently faced by Kazakhstan. Smuggled products primarily originate from the United Arab Emirates and are sold in the local market at significantly low prices.

He stated, "Three years ago, illegal products accounted for 3% of total sales in Kazakhstan, but today it has reached 10%. As a result, we are now making efforts to draw government attention to this issue. The suspension of retail inspections plays a crucial role in this problem. Although illegal products are being sold, we are unable to take action due to the suspension of inspections.

As a result, JTI suggests considering exempting taxable goods from the inspection suspension.

JTI, a prominent international tobacco and low-risk product manufacturer based in Geneva, Switzerland, has recently set ambitious goals. The company plans to achieve carbon neutrality by 2030. Additionally, JTI intends to fully transition to using recyclable or reusable packaging materials. With approximately 46,000 employees and operations in 70 countries worldwide, JTI is a leading player in its industry.

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[1] JTI инвестирует около 80 млн долларов в экономику Казахстана