Tobacco Industry Reacts on Japan Disaster

Published on April 7th, 2011 11:56

Major Tobacco companies, such as Japan Tobacco and Philip Morris International have issued official statements in regards of the disaster in Japan. Philip Morris International markets Marlboro cigarettes, the world’s top-selling cigarette, Parliament, Virginia Slims, L&M and other famous cigarette brands.

Japan Tobacco, the leading tobacco company in Japan, admitted last week that it had to delay shipments of its products due to the severe destruction caused by tsunami and the most severe earthquake in the country’s history that took place about two weeks ago.

Japan Tobacco that holds nearly 60 percent of local cigarette market, reported shipments will be delayed until April 10. The company said that the supply chain and some production lines were severely damaged by 9.0-magnitude and subsequent huge tsunami that destroyed localities on northeastern coast on March 11th.

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JT admitted that it would reduce to 25 flagship products, among which is Mild Seven and other brands, in order to replenish product inventories and ensure constant supply of its key products. It also said that the worsened distribution conditions, manufacturing units damage and blackouts, which resulted from the huge earthquake triggered the shipment delay, which lasted almost 2 weeks. The company mentioned that it would need some time to repair the factories, while its 25 major brands would be temporarily produced on other factories located in western Japan. The key 25 brands represent about 65 percent of the consumer demand, according to the figures revealed in February.

Approximately 27,000 people reported dead or missing in the country, after the monster quake and the massive tsunami it triggered.

Economists are checking each day their growing bleak forecasts for the country that faced their northeast region infrastructure destroyed. Many companies have closed factories, while others reduced output significantly to prevent power outages in Tokyo.

Japan Tobacco’s manufacturing units in Tomobe, Koriyama and Kita-Kanto has stopped operations due to destruction in the facilities. The company reported it started the prosses of assessing losses and expenses on recovery.

In addition, the company has seen its sales offices, distribution warehouses and processing facilities in Mito, Sendai, Aomori and Utsunomiya being damaged and suspended as well. Japan Tobacco admitted it would focus its production on the manufacturing units in the western part of the country. In the meantime, Philip Morris International, the leading tobacco company in the world, declared during the Conference of Consumer Analyst Group of Europe that the disaster in Japan would not impact significantly the company’s sales and revenues.

The company said that it had to close four of its 28 distribution facilities in Japan due to damage, but expects two of them to be re-opened this week, while the distribution from the other two centers would be rearranged to the closest centers.

By Joanna Johnson, Staff Writer. Copyright © 2011 TobaccoPub.com. All rights reserved.


Related tags: tobacco industry | japan tobacco | cigarettes manufacturer | philip morris

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