Tobacco Asia

52 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 "Growing Tomorrow reflects the investments we're making today in American manufacturing and jobs," said David Waterfield, president and c.e.o. of Reynolds American Inc. "By expanding manufacturing capabilities and strengthen- ing our workforce, we're building on more than 150 years of investment in the US economy to ensure our competitiveness for the future." The company currently employs more than 4,300 people in the US across manufacturing, engineering, science, and corporate functions. Reynolds American also highlighted the role of its domestic supply chain, which includes agricultural partners and tobacco growers. In 2025, the company ranked as the largest purchaser of US tobacco leaf, underscoring its links to farming communities. Ukraine Busts Massive Cigarette Factory Ukraine's Bureau of Economic Security (BEB) dismantled what authorities describe as the largest illegal cigarette factory uncovered by the agency to date, shutting down an industrial- scale operation in the western city of Chernivtsi. Investigators said a group of about 40 people organized the operation, producing filtered cigarettes under the guise of well-known international brands. The facility operated out of a warehouse equipped with industrial machinery and maintained a full production cycle. The factory ran around the clock, supported by industrial generators and on-site living arrangements for workers, allowing continuous output. Production capacity reached up to 720,000 packs per day, authorities said. During searches, law enforcement officers seized two complete production and packaging lines, along with 750,000 packs of finished cigarettes. Officials also confiscated 149 boxes of fermented tobacco, cigarette paper, filter rods, and packaging materials bearing international brand markings. The estimated value of the seized equipment, products, and related materials exceeds UAH200 million (US$4.9 million). Authorities said the operation generated significant illegal income. "The monthly illegal income exceeded UAH1 billion. This is the largest underground cigarette production facility uncovered by the BEB since its inception," the agency noted. The case is under investigation under Article 204 of Ukraine's Criminal Code, which covers the illegal manufacture and distribution of excisable goods. Pakistan Cigarette Output and Tax Decline Pakistan's Federal Board of Revenue (FBR) collected more than PKR140 billion (US$500 million) in taxes from the tobacco sector during the 2025–26 fiscal year, reflecting continued contributions from cigarette manufacturing despite a decline in output. Official data shows total tax receipts reached PKR140,179 million (US$500 million), with federal excise duty (FED) accounting for the majority of the intake. Sales tax contributed a smaller but still notable share, in line with the structure of tobacco taxation, which places heavier duties at the production stage. Cigarette production totaled 29.607 billion sticks during the period, highlighting the scale of operations across the industry. However, this figure marked a decrease from 36.877 billion sticks recorded in the previous fiscal year, indicating a contraction in output. Tax revenues also declined compared to the prior year. In 2024–25, FBR collected PKR289,537 million (US$1.03 billion) from the tobacco sector, more than double the latest total. The drop points to shifts in production levels, pricing structures, or broader market and regulatory dynamics affecting the industry. Pakistan's tobacco tax system relies heavily on FED, which authorities apply at the manufacturing stage, while sales tax applies along the supply chain. This framework continues to shape revenue collection patterns within the sector. Despite the year-on-year decline, tobacco remains a significant contributor to government revenues, supported by large-scale manufacturing and consistent demand. The latest figures underscore the sector's ongoing role in Pakistan's fiscal landscape, even as output and tax intake fluctuate.

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