Cigarettes and Tobacco News

May 10, 2007 -- HONG KONG-- Golden Dragon Group (Holdings) Ltd., purveyors of the world's first "electronic cigarette", expects sales to double in 2007 as it expands overseas and some of China's legions of smokers try to kick the habit.

The firm hopes its Ruyan "e-cigarettes" -- battery-powered, cigarette-shaped devices that deliver nicotine to inhalers and otherwise hope to emulate the smoking experience -- can find a market as tobacco substitutes, for health or pleasure.

"The nicotine is delivered to the lungs within 7 to 10 seconds," said Scott Fraser, Vice President of SBT (Holdings) Co. Ltd., the Beijing-based firm that first developed the e-cigarette technology in 2003 and which is now controlled by Golden Dragon.

"It feels like a cigarette, looks like a cigarette, it even emits vapour.

"In many ways, it is like an actual smoking experience, and that's what makes us different," he told Reuters.

They sell for around $230 Cdn apiece and are already available in China, Israel, Turkey, and a number of European countries, but not yet the United States.

Shares in Golden Dragon have more than doubled in the past 12 months.

Competitors include global giants Pfizer and Novartis AG, which sell more familiar nicotine replacement products such as chewing gum, patches, and inhalers.

Early results are promising.

Golden Dragon's sales more than doubled to $40.4 million in 2006, after surging more than ten-fold to $19 million in 2005, a year after the technology was perfected. China -- home to 400 million smokers and a roughly $22.6 billion dollar tobacco industry -- accounts for 65 per cent of Ruyan sales. The firm estimates around 10 percent of China's smokers are attempting to quit, and averaging a 2 percent success rate.