Japan Tobacco faces falling volumes of the cigarettes selling, so, the company decided to roll-out selling its Ploom Tech tobacco-based e-cigarette in cities across Japan next year. Such a strategy is a part of a fight with its principal rival Philip Morris.
Japan Tobacco is trying to meet the growing demand for “vaping” products, next year company will focus on ‘heat not burn’ products. This the world’s third-largest tobacco company includes brands Winston, Mevius and Benson & Hedges. During last year, Japan Tobacco has invested a lot in expanding its production capacity for Ploom Tech tobacco capsules.
The fast-changing demand makes Japan Tobacco to be extremely attentive to the clients’ preferences. In January 2017, the company rolls out new e-cigarette campaign. If people want vaping, let them vape. On Friday, Yasuhiro Nakajima, vice president of emerging products, held an investor meeting in London.
Japan and falling volumes of tobacco industry
All tobacco companies face falling volumes in developed markets due to higher taxes and growing health concerns. E-cigarettes could accelerate that growth in the long term but the global picture is as yet unclear as regulations differ in various countries.
“We own tobacco stocks because they are high-quality, high-margin businesses that generate a lot of cash flow and the profit pool is still growing,”
said Jonathan Fell, portfolio manager of Ash Park Capital, which owns shares in Japan Tobacco.
“It’s a real wait-and-see thing at the moment,” he added.