TobaccoReporter logo

Tag: Japan Tobacco

  • Japan Tobacco Urged to Divest Drug Unit

    Japan Tobacco Urged to Divest Drug Unit

    Photo; Taco Tuinstra

    LIM Advisors called on Japan Tobacco to divest its 53 percent stake in Torii Pharmaceutical Co. to boost shareholder value.

    In a letter reviewed by Reuters, the Hong Kong-based activist fund said JT doesn’t have synergies with the drug unit or the expertise to manage its research and development. LIM plans to bring its proposal to the annual general meeting of shareholders in March.

    The proposal by LIM, which holds less than 1 percent of Japan Tobacco shares, comes as Japanese regulators have frowned on so-called parent-child listings on the grounds that they can infringe on minority shareholder rights.

    JT is one-third owned by the Japanese government.

    LIM is also pushing for corporate charter amendments to improve governance, including a prohibition of Japan Tobacco executives retiring to take jobs at Torii.

    Established in 1995 by investment fund veteran George Long, LIM has launched several governance motions in Japan in recent years.

  • Branching Out

    Branching Out

    Photo: JTI

    Ploom X debuts in the United Kingdom.

    By George Gay

    Many people find it difficult to understand why not all smokers have experimented with reduced-risk vaping devices and subsequently used them to cut down or quit their consumption of combustible cigarettes, but there are, in fact, any number of reasons. What is more difficult to understand is why some smokers have never tried vaping devices. Though, again, it is not hard to come up with a few reasons. Smokers might, for instance, eschew disposable vaping devices on environmental grounds but find other types of devices rather daunting. While some people like gadgets, especially when they come with lots of options controlled by multiple buttons, lights and digital displays, other people see these options and their controlling levers as overly complex—as providing more options for things to go wrong.

    Japan Tobacco International perhaps had this sort of thing in mind when it developed its Ploom X heated-tobacco product (HTP), an updated version of its Ploom S. Ploom X, which has been available in Japan for almost 18 months and which made its beyond-Japan debut when it was launched* by JTI U.K. at the beginning of November, is a sleek, compact, minimalist HTP that, at first glance, has no buttons, lights or displays—just a USB port at the bottom of the device and, at the top, a slider that, when moved to the side, reveals a hole—the entrance to the device’s “oven”—into which tobacco sticks, called EVO sticks, are placed.

    Of course, there is a “button,” one activated by touching the button area of the front panel of the device, and, when the device is in use, there is an LED display supported by a vibration function, which together provide notifications of such things as battery charge level, heating time, vaping time and possible malfunctions. But the thing is, even I, an aged technophobe, was able to master the device in no time at all because of a simplicity of operation made possible in part by its having only one heating mode. This is basically how it goes: Move the slider to the right, insert the tobacco stick, wait briefly for one flash of the LED display and two short vibrations, and you’re ready to vape.

    In fact, two of the main things I took away from going through the simple process of taking a new Ploom X device out of its box, reading the instructions, inserting a tobacco stick and taking a few puffs were that this was a product that, with its sleek look and accessories, would appeal especially to young adults while, because of its operational simplicity, also  being comprehensible to us older folk. And this is important if the aim is to encourage as many smokers as possible to switch from combustible cigarettes to less risky products. It is easy to forget that smokers come in all shapes and sizes across the adult age spectrum, and while, arguably, younger adult smokers have more to lose by continuing to smoke, older smokers should not, in my view, be left behind.

    This need to cover all bases seems to be at the heart of JTI U.K.’s strategy. While it already had a range of alternative products on the U.K. market, it has launched Ploom X even though HTPs have played second fiddle to other vaping devices in the country—though a second fiddle that is starting to make more noise, perhaps.

    Ploom is said to have been improved by using a higher heating temperature—up from the 230 degrees Celsius of Ploom S to 295 degrees Celsius of Ploom X—and a redesigned heat-flow system to ensure a more consistent nicotine delivery and a more enhanced flavor delivery from the first puff. Adjustments made to the airflow system are said to have enabled a more consistent vapor delivery and increased vapor volume. And the new device is said to provide for longer (about 30 seconds) session times of up to five minutes and the possibility of using more tobacco sticks per charge: up to 22 sessions with one charge. At the same time, it requires minimal cleaning, amounting to about five seconds of effort after the consumption of 20 sticks.

    Of course, what is written above describes only half the story. If higher temperatures and redesigned heat-flow systems are to be meaningful, the tobacco sticks that are put into the devices must play their part, a part that is largely to do with providing choice. So while the device is simple to operate, choosing your EVO stick is more challenging, at least for the newcomer. EVO sticks, which contain a blend manufactured from “microground and fine-cut tobacco,” come in three broad categories: tobacco flavors, of which there are two, EVO Bronze and EVO Amber; menthol tobacco flavors, of which there are two, EVO Green and EVO Green Option; and fruit and menthol flavors, of which there are four, EVO Purple, EVO Purple Option, EVO Magenta and EVO Ruby. This sounds a little daunting but is less so once you know that the presence of the word “option” indicates the stick has a flavor capsule and once you know that “purple” means berry, “magenta” means grape and “ruby” means apple.

    There is further help at hand too because each product is given a five level rating on various aspects of its delivery: intensity and flavor in the case of the tobacco products; intensity, flavor and cooling in the case of the menthol tobacco products; and intensity, aroma and cooling in the case of the fruit and menthol products.

    Unfortunately, I’m not sure that these ratings are generally available. I believe they can be provided only to somebody who has demonstrated an interest, and this, I think, is a pity. The U.K. government has been generally progressive in its rule-making around vaping products, but this is an area where things perhaps need to be revisited. It is often said that the key to getting as many smokers to switch to less risky tobacco and nicotine products is to provide them with the information they need to make informed choices. It would be a tragedy if some smokers gave up on Ploom or other devices and products simply because, for instance, they had to choose sticks on the basis of insufficient information and therefore never arrived at the product best suited to them.

    That is perhaps unlikely. Having paid £39 ($47.63) for a device (there was an offer at the time of writing by which consumers could buy a device and two packs of sticks for £29), consumers are likely to persevere and maybe run the gamut of stick options until they find the flavor or flavors they like. Another reason to persevere is that a pack of 20 sticks sells for a recommended retail price of £4.50, about half the price of a pack of 20 combustible cigarettes, so, providing a 20-a-day consumer can afford the initial outlay for the device, she will more than recoup that outlay within about 10 days.

    *Ploom X was launched in the U.K. online nationwide at www.ploom.co.uk and in a limited number of stores in the Greater London area and elsewhere.
    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • Companies Strengthen Sustainability Creds

    Companies Strengthen Sustainability Creds

    Photo: Deemerwha studio

    Leading cigarette makers are strengthening their sustainability credentials.

    Philip Morris International, for example, recently announced new ambitions to “preserve nature” via biodiversity and water stewardship.

    These ambitions include protecting nature by achieving no net loss on ecosystems connected to PMI’s value chain by 2033; contributing toward a net positive impact on nature by 2050; scaling solutions toward a positive impact on water resources, measured as volume of water optimized and restored, by 2033; and contributing toward a positive impact on water resources by 2050.

    “As our new ambitions demonstrate, PMI understands that decarbonization, biodiversity protection, forestry management and water stewardship are deeply connected. We aspire to lead by example in the responsible and sustainable management of natural resources that can allow the promotion and protection of natural ecosystems,” said Jennifer Motles, chief sustainability officer, in a statement.

    PMI’s strategies to “tackle climate change” and “preserve nature” have been recognized by CDP, a not-for-profit charity that runs a global disclosure system for investors, companies, cities and regions to manage their environmental impacts. On Dec. 13, 2022, PMI received the Triple A score for its efforts across climate, forests and water stewardship.

    Imperial Brands, meanwhile, recently received a CDP Climate A score for a fourth successive year. The company has committed to reaching science-based net zero emissions by 2040 through a five-step approach outlined in its 2022 annual report. Earlier this year, the business was named as a Supplier Engagement Leader by CDP for a third successive year and as a Climate Leader by the Financial Times.

    “There is no other path than for all companies, all governments and all of society to pull together and get behind the decarbonization commitments that have been made,” said Tony Dunnage, global ESG (environmental, social and governance) director at Imperial, in a statement. “Our A score reflects our commitment to reducing our impact on the climate throughout our value chain, and we know that we can make a meaningful contribution.”

    Imperial was also rated A- by CDP for water security—an improvement on the B rating achieved a year earlier—and a C for its first response in a number of years to the forests survey.

    Japan Tobacco, too, has strengthened its commitment to sustainability. The company has been included in the Dow Jones Sustainability Asia-Pacific Index (DJSI Asia-Pacific) for the ninth consecutive year.

    The DJSI is a globally recognized ESG stock index and sustainability benchmark that tracks the stock performance of the world’s leading companies in terms of governance and economic, environmental and social dimensions, with constituents selected on the basis of the S&P Global Corporate Sustainability Assessment. The DJSI Asia-Pacific is an index of companies in the Asia-Pacific region, which is reviewed once a year and whose constituents are selected from approximately 600 major companies in the region.

    “We are honored that this year, again, JT has been selected in the DJSI Asia-Pacific,” said JT Senior Vice President and Chief Sustainability Officer Hisato Imokawa in a statement. “We believe that our inclusion in the index for the ninth consecutive year is the recognition of our earnest efforts to address ESG issues across our value chain. We are committed to promoting transparent and accurate disclosure of nonfinancial information, which has been a vital part of our agenda in recent years, and we recognize
    that this is an important initiative to promote stakeholder engagement and dialogue.”

  • Appointments at Japan Tobacco

    Appointments at Japan Tobacco

    Photo: Taco Tuinstra

    Kei Nakano, currently the senior vice president, will take on the role of executive vice president and representative director, effective Jan. 1, 2023, and March 24, 2023, respectively. Nakano will succeed Naohiro Minami, who will assume a new position as member of the board without the right to represent the company as of Jan. 1, 2023, and will resign as member of the board upon the ratification at the 38th annual general meeting of shareholders, scheduled for March 24, 2023.

    Suguru Fujiwara will assume the role of senior vice president of corporate affairs and communications for the tobacco business in Japan. Hisashi Shimobayashi will assume the role of senior vice president of information technology. Yuki Otaki will assume the role of senior vice president of D-LAB. These newly appointed officers’ positions are effective Jan. 1, 2023.

    A full list of resigning board members and changes in responsibility can be found on JT’s website.

  • Tools Of The Trade

    Tools Of The Trade

    Photo: JTI

    At a summer event in London, JTI showcases some of the devices that may help England achieve its smoke-free ambitions.

    By George Gay

    In his U.K. government-commissioned review, “Making Smoking Obsolete” [in England], Javed Khan said he had seen no evidence of a plan by industry to move toward meeting the ultimatum “for industry to make smoking obsolete,” which was included in the government’s 2019 prevention green paper. I’m not certain what is meant by “industry” here, but assuming it means partly or exclusively the tobacco industry, and perhaps the nicotine industry, this statement seems extraordinary. After all, one of Khan’s reviews, “Critical Interventions,” recommends promoting as effective tools to encourage smokers to quit their habit some of the products that, for well over a decade, the tobacco and nicotine industries have been developing, making available and promoting insofar as they have been allowed to do so.

    The independent e-cigarette industry has arisen almost solely for the purpose of converting as many smokers to vapers as possible—to making smoking obsolete, if you like. That is its raison d’etre. Of course, a purist might complain that individual vaping industry firms also want to make a profit, but making a reasonable profit provides funding for new developments and, more generally, makes the world go round.

    So perhaps the government’s ultimatum was aimed only at the tobacco industry. But even in this case, it seems somewhat uncharitable not to give recognition to the enormous investments and efforts that have been made by tobacco companies in developing what I am comfortable calling lower risk products and, especially, in the scientific validation of their products’ lower risk credentials. And this is not to mention that, as far as I am aware, it was individual tobacco companies that first started to apply the concept of “harm reduction” to tobacco/nicotine consumption and that, in the U.K., first suggested setting a target date for ending smoking: 2027.

    If my memory serves me correctly, the emergence of the tobacco harm reduction principle predated the arrival of vaping products and was based on snus, a product that is without doubt one of the least risky tobacco products of all but one that, inexplicably, was and is banned in the U.K. and one that Khan believes should remain banned. And it is worth mentioning that the country might conceivably have been well on the way to meeting the 2027 target if the government had been more ambitious and reacted more positively in 2017, when the target was suggested, largely based on the use of heated-tobacco products (HTPs). Certainly, I think the U.K. would have been in a better place if e-cigarette companies had been allowed to advertise the consumption of their vaping products as being 95 percent less risky than the consumption of combustible cigarettes, a figure that, to its credit, the government had long accepted.

    Coincidentally, a range of U.K.-market, lower risk products was on display during Japan Tobacco International U.K.’s summer event held at the Mandarin Oriental Hotel in London on July 13, one of which was launched in 2019 and another of which was launched in 2020—so, in line with the government’s ultimatum, though not necessarily in response to it. There were three products in all—a vaping device, an HTP and a nicotine pouch—so, at the very least, JTI U.K. must be given credit for having made a huge effort, if not toward making smoking obsolete per se but toward providing as far as it can the tools and encouragement for smokers to switch to less harmful products. It is, after all, beyond the power of a single company to “make” smoking obsolete; only the government has the power to come close to doing that and, no doubt for good reasons, it has chosen not to do so.

    The summer event, dubbed “Innovating for Tomorrow,” was attended by about 300 people, including those representing trade and retail partners, community investment partners, agencies, think tanks and the media. About 20 politicians from across the political spectrum were also scheduled to attend, though whether they all tore themselves away from the Conservative Party’s leadership hustings in Westminster I don’t know. Given this attendance and an abundance of fine drinks and delicious food, it is not surprising that the evening was devoted, aside from two short speeches—by Charlie Cunningham-Reid, U.K. corporate affairs and communications vice president for JTI U.K., and Gemma Bateson, U.K. sales director—to relaxed discussions around and away from the product displays. On what was for England a hot day, the venue, with its two large, airy rooms and pleasant garden overlooking Hyde Park, lent itself to such discussions.

    One of the products on display was Logic Compact (more information on the products displayed is available at www.jti.com/europe/united-kingdom), a closed-tank e-cigarette that is used with pods of e-liquid available in a range of flavors. At the display stand for these products, much was made of the high level of testing that was carried out on the devices and e-liquids. And, interestingly, a figure from the Office of National Statistics that was on display had it that about 3.3 million people in the U.K. used e-cigarettes, which was something of a testament to the effort that had been made by the vaping and tobacco industries to deliver smoking obsolescence.

    The most recent JTI U.K. reduced-risk product to be made available on the U.K. market and that was on display at the summer event was Ploom, an HTP launched in 2020. Ploom is said to offer an authentic smokeless tobacco experience delivered through the action of an innovative heating technology that causes no combustion and no burning and therefore produces no smoke or tar. Consumers have already embraced e-cigarettes, and the government has largely accepted them, so JTI U.K. will be hoping to see the same level of acceptance for HTPs. These products are certainly likely to appeal to consumers on price, especially those used to paying around £9 ($10.77) for a pack of cigarettes. After an initial outlay of about £45 on a device, consumers pay about £4.50 for a pack of 20 EVO tobacco sticks, which come in a range of flavors and strengths.

    Meanwhile, JTI U.K.’s Nordic Spirit nicotine pouches, which were launched in the U.K. in 2019 and are available in a range of flavors and strengths, are said to comprise a discreet product that can be used at any time since, on consumption, they produce no smoke or vapor and contain no tobacco. Here is a product, I think, that indicates the length JTI U.K. has gone to cut the use of combustible products. When it launched Nordic Spirit, the company could have had little idea how the product was going to be received because there was little knowledge about such products among U.K. consumers, who, after all, had not been allowed to buy snus, a cousin of the nicotine pouch. Surprisingly, perhaps, but encouragingly, participants at the London event were told that sales growth had been good, which is perhaps an indication of the importance of choice in offering alternative products to smokers, who too often are treated as if they comprised one homogeneous group with one set of likes and aspirations.

    The news about the growing interest in nicotine pouches must be good, too, for the environment. This is a pared-back product that must have a low negative impact on the environment, a feature that we are all discovering is hugely important. I have to say, too, that during conversations around the display stands, I heard of the initiatives being undertaken by JTI U.K. to ensure that when alternative devices are no longer operable, they are disposed of properly. There is probably some way to go in regard to this, but you have to say that these efforts are likely to be some way ahead of those of the government. As I am writing this piece, of the five people still standing for the leadership of the Conservative Party and therefore to become the next prime minister, only one was unequivocally backing the government’s net-zero emissions by 2050 target.

    It’s worth noting that a small pamphlet, “JTI U.K. at a Glance,” that was made available to participants at the summer event indicated that JTI is still committed, throughout its global operations, to net-zero greenhouse gas emissions by 2050.

    George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.
  • JT Reports ‘Robust’ Performance

    JT Reports ‘Robust’ Performance

    Masamichi Terabatake (Photo: JT Group)

    The JT Group reported net revenue of ¥1.27 trillion ($9.55 billion) for the second quarter of 2022, up 10.7 percent over that reported in the comparable 2021 quarter. Core revenue at constant exchange rates increased by 3.7 percent to ¥1. 14 trillion. Adjusted operating profit at constant currency increased by 8 percent to ¥386.7 billion.

    On a reported basis, adjusted operating profit increased by 15.8 percent to ¥414.9 billion. Operating profit increased by 18.9 percent to ¥383 billion. Profit increased by 17.3 percent to ¥264.1 billion.

    “In the first half, the JT Group delivered a robust performance, mainly driven by strong pricing,” said JT Group President and CEO Masamichi Terabatake in a statement. “We are also encouraged by the Ploom X volume and share performance in Japan. In the second half of the year, we will be leveraging learnings from Japan for international Ploom X launches.

    “We have revised our 2022 full year reported adjusted operating profit and profit guidance upwards, driven by favorable currency movements against the Japanese yen. However, the adjusted operating profit at constant FX is revised downwards considering higher input costs impacting our supply chain operations. Dividend per share guidance for full year remains unchanged at 150 yen per share. The interim dividend is 75 yen per share.

    “Regarding Russia, while we continue to manufacture and distribute our products in full compliance with national and international sanctions, the operating environment is becoming increasingly complex. Under these circumstances, the JT Group continues to evaluate various options for its Russia business, including potentially transferring its ownership, and taking necessary decisions to address the changing situation in accordance with the group’s management principle.”

  • JT Considers Sale of Russian Operations

    JT Considers Sale of Russian Operations

    Japan Tobacco on Thursday announced it was considering selling its Russian operations after suspending investment and marketing activities in the country last month following Moscow’s invasion of Ukraine.

    The statement by JT, market leader in Russia, came after it said in March it would continue manufacturing in the country, where it has four factories and 4,000 employees.

    That announcement drew criticism after many global brands pulled out over the invasion of Ukraine and governments, including Japan, levied heavy sanctions against Moscow. Russia calls its action in Ukraine a “special operation,” according to Reuters.

    Japan Tobacco’s move to explore a sale of its Russia operations makes it the last major international cigarette-maker to speak publicly about potentially leaving Russia, the world’s fourth-biggest cigarette market.

    Marlboro owner Philip Morris, the No.2 biggest player in the country, said last month that it plans to scale down manufacturing operations in Russia and that it is working on options to exit the market.

  • JT: Strong Quarter Despite Uncertainty

    JT: Strong Quarter Despite Uncertainty

    JTI’s headquarters in Geneva

    The JT Group reported revenues of ¥581.5 billion ($4.45 billion) in the first quarter of 2022, up 6.2 percent over that reported in the first quarter of 2021. Adjusted operating was ¥194.9 billion during the quarter, 9.4 percent more than in the comparable 2021 quarter. The JT Group posted an operating profit of ¥178.4 billion and a profit of ¥124.1 billion in the quarter, up 11.4 percent and 9.1 percent, respectively, over the 2021 quarter.

    “Following the combination of the tobacco businesses this year, the JT Group delivered strong results with adjusted operating profit at constant FX increasing by 4.5 percent,” said JT Group CEO Masamichi Terabatake in a statement. “However, several uncertainties remain, such as the changing operating environment in Russia, the rapidly evolving operational costs and a very volatile inflation. Considering these factors, as of the first quarter, we have decided not to revise the full year guidance.

    On March 10, the JT Group announced the suspension of new investments and marketing activities in Russia. The company is currently evaluating various options for its Russia business, including potentially transferring its ownership.

    Russia is one of the JT Group’s largest markets. The company has four factories and employs nearly 4,000 people in the country. Terabatake said the company remains committed to its employees in Russia, including to secure their employment.

    “We will continue to closely monitor the situation and prioritize the safety of our employees and their families by extending all possible support to affected people. We will take all necessary decisions to address the changing situation in accordance with the group’s management principle, which is to pursue the 4S model.”

    Under the 4S model, the JT Group strives to fulfill its responsibilities to consumers, shareholders, employees and the wider society.

  • Firms Scale Back in Russia and Ukraine

    Firms Scale Back in Russia and Ukraine

    Photo: BAT

    The leading tobacco companies are adjusting their strategies in Russia and Ukraine following the war between those countries.

    Philip Morris International announced the suspension of its planned investments in the Russian Federation, including all new product launches and commercial, innovation and manufacturing investment. PMI has also activated plans to scale down its manufacturing operations amid ongoing supply chain disruptions and the evolving regulatory environment.

    “We have watched with shock the war in Ukraine and condemn the violence in the strongest possible terms. We stand in solidarity with the innocent men, women and children who are suffering,” said PMI CEO Jacek Olczak in a statement. “We join the many voices calling for an immediate end to the war and the restoration of peace.”

    Olczak said PMI had helped evacuate more than 800 people from the most impacted areas; provided critical aid to employees who remain in Ukraine; and provided those who have left the country with logistical, medical, financial and other practical support in neighboring countries. PMI is continuing to pay salaries to all its Ukrainian employees during this period, the company said.

    Ukraine accounted for around 2 percent of PMI’s total cigarette and heated-tobacco unit shipment volume and under 2 percent of PMI’s total net revenues in 2021. The company has one factory and approximately 1,300 employees in the country.

    In 2021, Russia accounted for almost 10 percent of PMI’s total cigarette and heated-tobacco unit shipment volume and around 6 percent of PMI’s total net revenues. The company employs more than 3,200 people in the country.

    BAT, which employs more than 1,000 people in Ukraine and around 2,500 people in Russia, said it had suspended all business and manufacturing operations in Ukraine and suspended all planned capital investment into Russia.

    “In Ukraine, we have suspended all business and manufacturing operations and are providing all the support and assistance we can to our colleagues, including relocation and temporary accommodation. Our businesses bordering Ukraine are providing assistance to the humanitarian relief effort,” the company wrote on its website.

    “In Russia, we have a full establishment of our people right across the country, including substantial local manufacturing. Our business in Russia continues to operate. As a key principle, we have a duty of care to all our employees at this extremely complicated and uncertain time for them and their families.”

    Japan Tobacco International, which has four factories and nearly 4,000 employees in Russia, announced the suspension of all new investments and marketing activities as well as the planned launch of its Ploom X heated-tobacco product in Russia, citing the unprecedented challenges of operating in Russia at this time. “Unless the operating environment and geopolitical situation improve significantly, JTI cannot exclude the possibility of a suspension of its manufacturing operations in the country,” the company wrote in a press statement.

    Imperial Brands also suspended all operations in Russia, halting production at its factory in Volgograd and ceasing all sales and marketing activity.

    “We have already suspended our operations in Ukraine in order to prioritize the safety and well-being of our 600 employees in that country,” the company wrote in a statement.

    Russia and Ukraine are relatively small markets for Imperial Brands, representing around 2 percent of net revenues and 0.5 percent of adjusted operating profit in 2021.

  • JT Reports Robust 2021 Driven by Tobacco

    JT Reports Robust 2021 Driven by Tobacco

    Photo: JTI

    The JT Group’s revenue increased 11.1 percent to ¥2.32 trillion ($20.15 billion) in 2021. Adjusted operating profit a constant exchange rates was up 22.9 percent to ¥598.4 billion. On a reported basis, operating profit increased 25.4 percent to ¥610.4 billion. The company reported an operating profit of ¥449 billion, up 6.4 percent over that reported in the previous year.

    “The JT Group reported a robust performance in 2021, driven by strong momentum across the tobacco business,” said JTI President and CEO Masamichi Terabatake in a statement. “Our consumer-centric approach and strong brand portfolio have enabled share gains in the majority of our markets and resulted in a record sales volume in the international tobacco business.

    “Despite a challenging operating environment, including the ongoing pandemic, the group accomplished several important milestones in the year. We implemented measures to generate sustainable growth, notably in our priority investment category where we launched our new HTS [heated tobacco sticks] device, Ploom X, starting in Japan. We also successfully implemented various initiatives related to the new operating model for the consolidated tobacco business, which went live this January.”

    Going forward, JTI’s priority will be to expand its presence in the reduced-risk product (RRP) category, with an emphasis on HTS products. The company aims to break even in the RRP category by 2027 by achieving a heated tobacco segment share in the mid-teens across its key HTS markets.

    “To reach this goal, we are accelerating necessary business investments and expect an annual average growth rate of adjusted operating profit at constant currency to be mid-single digit during the 2022 business plan period,” said Terabatake. “Furthermore, we plan to grow profit, which in turn will increase shareholder returns, in line with our shareholder return policy.”