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Tobacco News
JTI: Cigarette consumption to fall 1% to 3% in 2002 Daily Edge Exclusives
  By: Joseph Chin, 2.43pm
Source: The Edge (my), 2002-04-25, via tobacco.org

JT International Bhd (JTI), which has a 16.6 per cent of the Malaysian cigarette market share, has forecast a dip in the industry volume by between 1.0 and 3.0 per cent in 2002.
Its chief executive officer David John Aitken said however, this is an improvement in the industry outlook, as JTI had initially expected a decline of between 3.0 and 5.0 per cent for the year.
Speaking to reporters after the company's annual general meeting on April 24, Aitken said the industry volume fell 1.0 per cent in 2001 and cigarette manufacturers were expecting the market to worsen further in 2002 due to weak economic conditions.
"However, after a 1.3 per cent decline in the first quarter of 2002, year-on-year, we have revised our outlook for this year," he said, adding that the more optimistic outlook is based on the economic recovery and higher consumption.
Aitken also said the industry is still facing a shortage of local tobacco supply, adding that JTI and its competitors are working with the National Tobacco Board and authorities to find ways to increase production.
JTI has stepped up its efforts to produce seedlings using the hydrophonic system to overcome the shortage after the crop was damaged in March last year due to heavy rains. In 2001, JTI had produced 30 million seedlings, which are equivalent to 2,000ha of planting, supplied to curers and farmers.
Aitken also expressed concerns about the smuggling of cigarettes into the country. One in five cigarettes smoked in Malaysia are contraband. He said cigarette manufacturers and authorities are working together to find ways to check smuggling activities.

He also hopes there would not be any further tax hikes this year as this could further encourage smuggling activities.


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