Tobacco Asia

50 tobaccoasia MANUFACTURING NEWS 制造新闻 We'd like to let you in on an industry secret You can view the latest issue of TOBACCO ASIA magazine and TOBACCO ASIA's archived issues and searchable content at www.tobaccoasia.com economies and local communities. As tackling counterfeit tobacco becomes a pressing issue, KT&G and other major tobacco companies are intensifying their efforts to address the problem. Philip Morris Eyes Export Potential from New Lviv Factory Philip Morris Ukraine may begin exporting cigarettes produced at its new facility in the Lviv region, according to c.e.o. Maksym Barabash, who spoke during a roundtable on Ukraine's economic recovery. Before the war halted opera- tions, the company's Kharkiv-based factory had produced 20 billion cigarettes annually, with half of that output shipped abroad—including to markets like Japan. Now, with a US$30 million investment in a new plant in Lviv, the company is exploring the possibility of re-entering the export market, particularly to nearby countries. Opened in May 2024, the Lviv facility runs five production lines and has already hit its planned capacity of 10 billion cigarettes per year. This plant now plays a key role in the company's Ukrainian operations. Since entering the Ukrainian market in 1994, Philip Morris has invested more than US$750 million in the country's economy. PTC Urges Adjustable Tax on Cigarette Paper Pakistan Tobacco Company (PTC) has called on the govern- ment to introduce an adjustable tax on cigarette paper as part of efforts to strengthen tax documentation and tackle the booming illicit cigarette trade, which it claims now dominates the market. Speaking at a pre-budget media session, PTC director Asad Shah voiced deep concerns over the unchecked growth of tax-evading cigarettes and highlighted the need for consis- tent enforcement of the track-and-trace tax stamp system. Without a level playing field in enforcement, Shah argued, "the policy is ineffective." He also suggested slashing the adjustable tax on acetate tow—from PKR44,000 (US$155) per kilogram to PKR4,000 (US$14) per kilogram. This, he said, would discourage rampant smuggling, which authorities have already targeted with the seizure of 450 metric ton of illicit acetate tow in 2025. Shah further urged that cigarette paper be subjected to adjustable tax, which would support full industry documenta- tion and help close tax loopholes. According to Shah, illicit products now make up 58% of Pakistan's cigarette market, with total annual consumption estimated at 82 billion sticks. He estimated that the industry could yield PKR570 billion in annual tax revenue, but noted that only PKR292 billion was collected in FY2023-24 and PKR223 billion in the first 11 months of the current fiscal year. "It is impossible to collect the remaining PKR50 billion in a single month," Shah warned, pointing to widespread tax evasion and suggesting that some non-governmental organiza- tions may be influencing policy based on "specific agendas." Despite holding a mere 42% share of the market, Shah emphasized that the formal sector still contributes 98% of the revenue. He pushed for stricter documentation rules across the board, stressing that 18 billion cigarettes are currently sold below the official minimum price of PKR162.25 per pack — often priced at or under PKR150 — with no legal repercussions. Pointing out that no one has ever been penalized for violating the minimum price law, Shah recommended that the government increase the minimum price further to counter the perception that cigarettes are cheap in Pakistan. "No policy can succeed without non-discriminatory implementation," Shah concluded, warning that untaxed cigarettes from local manufacturers continue to be sold openly without consequence. Group Seeks Factory's Removal from Dhaka Environmental group Bangladesh Poribesh Andolon (Bapa) appealed to authorities for the prompt relocation of a cigarette manufacturing facility situated within the Mohakhali DOHS residential area in Dhaka. In a released statement, the organiza- tion identified the British American Tobacco Bangladesh (BATB) plant as a key contributor to environmental degrada- tion in the locality. Bapa alleges that emissions from the factory—including nicotine and other chemical substances—are compromising air quality and increasing health risks for residents. The group also raised concerns about noise pollution and contamination of surrounding water bodies. The organization said the presence of such an industrial operation in a densely inhabited urban zone is especially detrimental to vulnerable groups such as children, the elderly, and students at nearby schools like the Bangladesh Interna- tional School. The statement also highlighted broader concerns about tobacco production, stating that its entire lifecycle— from farming to disposal—has harmful effects on ecosystems and public health. The use of chemical pesticides and fertilizers in tobacco cultivation, Bapa claims, has negative impacts on soil quality, aquatic environments, and biodiversity. The organization also expressed concern about how the factory was able to obtain necessary regulatory approvals and environmental clearances, given its location in a residential neighborhood. It called for an investigation into the matter. In its concluding remarks, Bapa urged the government to intervene and relocate the facility, citing the need to safeguard public health and the urban environment.

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