As it battles with a significant decrease in local smoking rates, witnessing a cigarette sales drop of 1 billion more than predicted, local big tobacco company and former state-monopoly, Japan Tobacco Inc (JTI) is trying to compensate by expanding into new markets. The 124.3 billion taka ($1.5 billion) deal, comes after JTI agreed to buy Russia’s Donskoy Tabak for about 90 billion rubles ($1.42 billion), last March.
Akij holds approximately 20% of the cigarette market in Bangladesh, and with a local smoking rate of approximately 23% in a country that boasts a population of about 163 million, that is quite significant. Japan Tobacco said that the deal would add approximately 17 billion units to the Japanese company’s sales volume.
Investments in reduced-risk products
Last February JTI also announced its plans to spend over 100 billion yen ($917.43 million) over the next three years on development and production of what it calls “reduced-risk products (RRP),” or safer tobacco alternatives. “For Japan Tobacco’s continuous growth, we must win in the RRP category,” said JTI’s Chief Executive Officer, Masamichi Terabatake in a news conference at the time.
Read Further: Reuters