TobaccoReporter logo

Tag: Egypt

  • Eastern Boosts Production to Cigarette End Shortage

    Eastern Boosts Production to Cigarette End Shortage

    Egypt’s Eastern Co. will provide 50 million more cigarettes daily starting Aug. 13, 2023, to alleviate the prevailing cigarette crisis, reports Ahram Online.

    The company will increase the number of cigarettes in the market to 150 million per day, up from 100 million cigarettes, Eastern Co.’s Managing Director and CEO Hany Aman was quoted as saying.

    Tobacco prices have surged recently on the black market amid a shortage of supply in the market.

    Aman said that by boosting supply in the market, the company aims to control unjustified price hikes and curb speculative practices by some traders, who began to stockpile cigarettes after they heard of a new cigarette taxation legislation.

    The MD expected cigarette prices to return to normal within three to four weeks following the production increase.

    Fakhry El-Fiqi MP, who heads the Planning and Budget Committee in the House of Representatives, recently said that the committee will discuss a new cigarette taxation law at the beginning of the fourth legislative session in October.

     According to Eastern Co., Egyptians spent EGP17 billion ($550.15 million) cigarettes during the 2021-2022 fiscal year.

  • Egypt: PM Cigarette Prices Increase

    Egypt: PM Cigarette Prices Increase

    Image: Tobacco Reporter archive

    Prices of 10 types of Philip Morris cigarettes have been raised in Egypt, the Tobacco Division of the Chamber of Commerce announced. The increase went into effect April 6, according to the Egypt Independent.  

    The increase is attributed to the rise in U.S. dollar price against the Egyptian pound. Ibrahim Imbaby, head of the Tobacco Division at the Chamber of Food Industries with the Federation of Egyptian Industries, confirmed that Philip Morris raised prices as a result of the decline in hard currency management and the rise in production costs.

  • Egypt Cigarette Prices Increase

    Egypt Cigarette Prices Increase

    Image: Tobacco Reporter archive

    The Eastern Tobacco Company raised prices of cigarettes, cigars and pipe tobacco in Egypt by an average of EGP2 ($0.06) to EGP3 per pack, according to Ahram Online.

    This is the first price increase for the company in 2023 following increases in September 2022 and March 2022.

    The company attributed the increase to the global high costs of raw materials and the depreciation of the Egyptian pound, reports Egypt Today.

    Eastern Tobacco Company is Egypt’s largest producer of tobacco.

  • Eastern Co. Increases Prices of 10 Brands

    Eastern Co. Increases Prices of 10 Brands

    Photo: Ahmed

    The Eastern Co. in Egypt has increased the prices of 10 popular cigarette brands, reports the Daily News Egypt.

    The new prices took effect Sept. 4, after receiving approval from the company’s board of directors in accordance with the provisions of Egypt’s VAT and health insurance laws.

    Eastern Co. Managing Director and CEO Hani Aman attributed the price hikes to a rise in the cost of raw materials. We were careful to make the increase as low as possible,” he was quoted as saying.

    The price increases ranged from EGP1.5 ($0.08) to EGP2 and included popular brands like Cleopatra Box, Cleopatra Super and Mondial.

    This is Eastern Co.’s second price increase in about six months. In March, the company increases the prices of 10 types of local cigarettes by rates ranging from 4.3 percent to 9.5 percent.

     The Eastern Co. reported an after-tax net profit of EGP4.25 billion during the nine months ending in in March, up 9 percent over the comparable 2021 period.

     Sales increased by 6 percent to reach EGP51.47 billion during the period from July 2021 to March 2022, compared to EGP48.74 billion in the same period of last year.

  • UTC to Manufacture PM Products for Egypt

    UTC to Manufacture PM Products for Egypt

    Photo: akolosov.art

    Philip Morris is set to start manufacturing its products for the Egyptian market at its United Tobacco Co. (UTC) subsidiary, reports Daily News Egypt.

    The current licensee, Eastern Co., will continue to manufacture Philip Morris’ cigarette products until its production stock has been depleted.

    Philip Morris stated that it is proud of the strategic partnership with the state tobacco company, which lasted for nearly half a century, and is looking forward to sustaining this partnership through Eastern’s shareholding in UTC. In May, Egypt’s General Assembly approved Eastern Co.’s plan to buy a 25 percent share in UTC for EGP100 million ($5.2 million), according to the Enterprise Press.

    Eastern Co. Managing Director Hani Aman said at the time that his firm would be represented by two members on UTC’s board of directors.

    The acquisition was part of the Philip Morris subsidiary’s agreement with Eastern Co. to locally manufacture cigarettes. UTC was the only company to bid in last year’s tender after other companies complained that the conditions of the tender would establish a monopoly over the local market.

    Philip Morris confirmed its full commitment to all existing contractual relationships with traders and suppliers to guarantee the availability of its products across Egypt’s governorates. The company said it will continue to provide all of its products at the same prices as recently officially set with no change to the packaging.

    Aman said that the Eastern Co. is trying to absorb the rise in production costs internally, resulting from the recent rise in the cost of raw materials.

    He pointed out that the disruption of supply chains had a direct impact on the rise of some production inputs, in addition to the impact of the rise in the price of the U.S. dollar on other products.

    Eastern Co.’s tobacco business reported revenues of EGP12.78 billion for the first nine months of fiscal year 2021-2022, up 5 percent over those of the comparable period in the previous year.

  • Bank Policies Threaten Egypt’s Leaf Imports

    Bank Policies Threaten Egypt’s Leaf Imports

    Photo: Taco Tuinstra

    The reluctance of banks to open the documentary credits required to import leaf tobacco is endangering the operations of Egypt’s tobacco factories, reports Egypt Independent, citing the Tobacco Division of the Federation of Egyptian Industries ((FEI).

    FEI Division Head Ibrahim al-Embabi warned that more than 23 factories will close following the Eid al-Fitr holiday, after which they will have used their entire stock of raw tobacco. Due to a ban on tobacco cultivation in Egypt, the country’s tobacco industry is entirely dependent on leaf imports.

    Earlier this year, Egypt’s Central Bank of Egypt stopped collecting documents upon import, requiring importers to cover the entire value of the shipment before importing. The decisions forced many factories, including tobacco manufacturing plants, to suspend their imports of raw materials.

    Al-Embabi said that stopping the import of raw materials and the consequent disruption of production will lead to the displacement of nearly 30,000 direct workers in the sector, and threaten the state’s intake of taxes and fees paid by cigarette and tobacco companies, which exceed EGP79 billion ($4.27 billion) annually.

    Tobacco factories import raw materials worth about $500 million each year while exports reach $120 million annually.

    The remaining percentage is used to satisfy the needs of the local market. Despite its high consumption of imported raw materials, the tobacco sector is the state treasury’s most important source of revenue, according to al-Embabi.

  • Egypt Legalizes E-Cigs

    Egypt Legalizes E-Cigs

    Photo: Dzmitry

    The vapor industry has welcomed Egypt’s decision to allow the import and commercialization of e-cigarette product.

    “The lifting of the ban highlights the Egyptian authorities’ progressive approach to e-cigarettes and sets the stage for the creation of a regulated market rich with business opportunities, through serving the demand for easily accessible, quality products by legal age (adult) consumers across the country,” wrote RELX International, a leading player in the segment, in a statement dated April 24.

    With its recent decision, Egypt joins global and regional markets, such as Kuwait, Saudi Arabia and the United Arab Emirates, which have legalized and commercialized the consumption of e-cigarettes. As regulators around the world become more accepting of e-cigarettes, the market is expected to continue its steady growth in the coming years.

    As of March 2022 global e-cigarette market revenues were $22.95 billion, and the market is expected to expand annually at a compound annual growth rate of 4.19 percent until 2027, according to Statista.

    “The decision by Egyptian authorities reflects its commitment to support legal businesses in the country while cracking down on the illicit trade of those products, in line with what we are seeing in an increasing number of markets around the globe,” said Robert Naouss, REXL International’s external affairs director for the Middle East, Northern Africa and Europe

    “The business and investment environment in the country will significantly benefit from this decision, as will adult consumers who can now conveniently, and legally, purchase better alternatives to combustible cigarettes. We look forward to working with our partners to grow and protect their income via our portfolio of quality products”

    By lifting the ban on e-cigarette products, Egyptian authorities have opened the door to a plethora of business and investment options, according to RELX International. “Authorized e-cigarette products are traditionally retailed by small- and medium-sized businesses, so the move will bolster existing businesses that sell such products, and will attract entrepreneurs wishing to set up new retail points across the country. It will likewise draw investment into the country from e-cigarette brands who wish to set up shop in the country and address the market,” the company wrote in its statement.  

    “Adult consumers stand to benefit from the move, as they now have legal access to e-cigarettes whether they wish to switch to a better alternative to traditional cigarettes. Several health authorities and regulators including the U.K.’s NHS and the Ministry of Health of New Zealand have positively clarified their position on vaping as a way for people to move away from smoking combustible cigarettes.

    “In addition, the decision will contribute to the country’s economic recovery post-pandemic via the collection of tax revenues from legally imported products. Simultaneously, it will allow Egyptian authorities to clamp down on tax evasion issues associated with illegal market players. In a similar vein, the move and balanced regulation of the market offers authorities and e-cigarette vendors a path to stem the spread of inferior and dangerous black-market products that do not meet the standards and regulations outlined by Egyptian and international authorities. In doing so, adult consumers can rest assured the products they do find on sale are indeed a reliable alternative to traditional cigarettes.”

     

  • Eastern to Move to 6th of October City

    Eastern to Move to 6th of October City

    Photo: Taco Tuinstra

    Eastern Co. of Egypt intends to transfer all production capacities from its factories to the industrial complex in 6th of October City within two years, reports Daily News Egypt.

    According to Managing Director Hany Aman, the company inaugurated the industrial complex with the aim of integrating all its production capacity.

    The license of the Moharram Bey factory is about to expire. An economic feasibility study revealed that Eastern Co. would be better off transferring production of that factory than increasing investment at the exiting location.

    The Ministry of Environment and the Industrial Development Authority must still approve the transfer process.

    In related news, Eastern Co.’s board of directors approved new consumer prices for the company’s cigarette products to account for higher raw material cost and fourfold increase in freight prices caused by the disruption of supply chains around the world.

    Cleopatra Box 10 now costs EGP11.5 ($0.73), Cleopatra King Size costs EGP18.5 and Boston/Belmont costs EGP19.5.

    Aman said the company seeks to strike a balance between maintaining its profit margin and the interests of smokers. Eastern Co. is currently studying the prices of cigars and molasses.

    Eastern Co.’s profits increased by 15 percent to EGP2.92 billion in the first half of fiscal year 2021–2022. The company’s revenues grew to EGP8.53 billion from EGP8.16 billion during that period. Eastern Co. sold about 5.5 billion cigarettes in February.

  • Egypt Increases Prices Of Popular Cigarettes

    Egypt Increases Prices Of Popular Cigarettes

    Photo: Jose

    Eastern Co. of Egypt has increased prices for 10 types of cigarettes, reports Egypt Independent

    The retail price of Cleopatra Box (10 cigarettes) rises to EGP11.50 ($0.73), Cleopatra King Size (20 cigarettes) rises to EGP18.50 and Cleopatra Soft Queen (20 cigarettes) rises to EGP19.

    In January 2018, the Egyptian House of Representatives approved an increase in cigarette prices to finance comprehensive health insurance by EGP0.75 per pack of 20 cigarettes, and an increase of EGP0.25 piasters every three years until the increase reaches EGP1.5 at the end of the period.

    Eastern Co. is the largest producer of tobacco in Egypt. The company was established on July 12, 1920, by a decree from Sultan Ahmed Fouad.