Turkish cigarette market delights Japanese

The world's third largest tobacco group is seeking to buy Turkey's state owned cigarette manufacturer.

    Pipe dream?  JT  looks to Turkey 
    for investment opportunities

    Plans to privatise the government-run tobacco and spirit industry has aroused huge interest from around the world.

    Japanese Tobacco is, however, the first company to emerge as a frontrunner for the huge sell-off. 

    The public auction for the state owned tobacco company Tekel will, according to reports, close on 26 September.

    Hiroshi Kimura, deputy chairman of JT, said the Turkish government would profit greatly from a JT and Tekel partnership.

    ”We'll purchase Tekel, which possesses 61 per cent of the Turkish cigarette market. The state will profit most from working with us. We're the strongest firm bidding for Tekel. We'll be the most responsive to the needs of the Turkish government."

    Kimura added, "We have no doubt about the successful future of Turkey."

    Lucrative market

    About 113 billion cigarettes were sold in Turkey in 2002, according to JT spokesman Tsuyoshi Miyashita, who declined to put a figure on how much Tekel's tobacco business would be worth.

    "Tekel is an attractive company and we want to get detailed information if available," JT spokesman Tsuyoshi Miyashita said, while noting the firm had "not decided whether to join" the bidding for the state-owned Turkish company.
      
     JT already has a factory in Turkey, manufacturing Winston, Camel, Monte Carlo and Salem cigarettes.
      
    The spokesman also said JT had taken part in preliminary bidding for Italy's state-owned ETI (Ente Tabacchi Italiani) in December although it has not decided whether to make a full offer.
      
    The preliminary tender was for expressions of interest in the company.
      
    "It does not bind us to a full tender and of course we have not made any suggestion on a [purchase] price," Miyashita said. 
      
    Why Turkey?

    The moves for the Turkish and Italian companies are to "improve profitability overseas and raise sales ... as the tobacco business is flat in Japan or falling in volume," he said.
      
    JT Deputy Chairman Responsible for Work Development, Gode Fridus Vranken, stated Turkey ranks sixth or seventh in the world market.

    Vranken said: "We don't even entertain the possibility of not winning the bid. Our goal is to purchase only the cigarette production and distribution."

    However, Vranken hinted at the possibility of job losses, saying that the existing JT facility employs at most 8,000 workers in its cigarette production line.

    Tekel presently employs 32,000 workers.

    SOURCE: Aljazeera + Agencies


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