Cigarettes and Tobacco News

Dec 21, 2005, BEIJING -- China's state-run tobacco monopoly has reached an agreement with Philip Morris Incorporated (PMI) for the licensed manufacture of the Marlboro brand of cigarettes in China, Agence France-Presse reported.

The China National Tobacco Corporation (CNTC) will also set up an international joint venture with PMI to market Chinese-brand cigarettes abroad, according to a joint statement by the two companies.

"The agreements signed today with PMI will allow us to exert our strengths and create significant opportunities for sustained long-term mutual growth and commercial success on a global scale", said Li Keming, deputy chief administrator of the State Tobacco Monopoly Administration.

The Marlboro brand will be produced under license at CNTC's affiliate factories and will be distributed by CNTC's official distributors nationwide in China.

Trial production began last year in anticipation of the agreement, with formal production expected to begin in early 2006.

"Our objective for cooperation with CNTC is to build a long-term global strategic partnership and the signing of these two agreements today constitutes an important and meaningful step in that direction," said Andre Calantzopoulos, chief executive officer of PMI.

The international joint venture company will be based in Lausanne, Switzerland with each side holding 50 pct.

The joint venture company will offer consumers a comprehensive portfolio of Chinese brands globally, expand the export of tobacco products China, and explore other business development opportunities, the release said.

Some 36 pct of China's population, or 350 mln people, are smokers.