Issue link: https://read.dmtmag.com/i/550325
50 tobaccoasia / Issue 3, 2015 (July/August) Although manufacturing and commercial enter- prises in tobacco are separate from each other, there are some exceptions. For example, Shanghai Tobacco Group (STC) is one that is both manu- facturing and commercial, and is a large intensive and modern state-run enterprise with business diversification mainly based around the local to- bacco industries in Beijing, Shanghai, and Tianjin. Today, STC also works in the supporting sectors, such as tobacco products storage and transporta- tion, printing, raw materials supply, etc, and op- erates diversified businesses in the sectors of lo- gistics, hotel operation, finance, insurance, and others, with a controlling stake or shares in nearly 50 other enterprises. In 2014, STC produced a total of 139.52 billion cigarettes (2.7904 million cases), up 2.03% year- on-year; sold 146.58 billion cigarettes (up 5.29%) and generated RMB108.378 billion (US$17.2 bil- lion) in manufacturing and commercial taxes and profits (10.13%), with manufacturing and com- mercial profits reaching a high of RMB26.479 bil- lion (up 8.79%). In particular, STC's high-quality cigarette products under such famous brands as Chunghwa, Zhongnanhai, Red Double Happiness, and The Panda sell very well and are also exported to many countries around the world. Since 2013, STC has actively developed new markets overseas, with its Chunghwa, Zhongnanhai, Red Double Happiness, and Golden Deer brands en- tering 13 taxable and duty-free markets in Aus- tria, Denmark, Turkey, Singapore, Myanmar, Ye- men, Namibia, Paraguay, etc. The group's brands are sold sold in 81 countries around the world. Moreover, STC managed to upgrade the level of its joint-venture operations by taking advantage of the projects under license with Nanyang Broth- ers Tobacco of Hong Kong and the US Tobacco Cooperative, and developed new markets for its Red Double Happiness in Chile, Argentina, Mongo- lia, Mexico, Singapore, and other countries. The company managed to introduce its medium-grade Golden Deer brand in Panama and Peru in Latin America. After 30 years of development, Zhong- nanhai has emerged as the number one blend-type brand in China, and has become a representative Chinese blend-type cigarette product for interna- tional markets. China's largest tobacco-growing province of Yunnan is popularly known as the "Kingdom of Tobacco" with a long history of tobacco growing, it also boasts many well-known brands. Integrating the operations of cigarette production and market- ing, matching supply of tobacco materials, scientif- ic and technological research, and business diver- sification. China Tobacco Yunnan Industrial Co., Ltd. (CT Yunnan) is the largest tobacco manufac- turing enterprise in China. Today, CT Yunnan has HongyunHonghe Tobacco Group (Hongyun) and Hongta Tobacco Group (Hongta) under its wing. The Hongyun group comprises a total of six cigarette factories, four in Yunnan (Kunming, Honghe, Qujing, and Huize) and one each in Xinjiang Uigur and Inner Mongolia (Ulanhot). In 2014, Hongyun saw its total assets grow to a total of RMB78 billion (US$12.4 billion), producing 264 billion cigarettes, and generating RMB65.4 billion in taxes and profits. Last year, the group ranked 155 th among the top 500 enterprises in China, with the sales of its popular Yunyan brand reaching 188 billion, and with its wholesale value reached US$17 billion. The Hongta group has four cigarette factories all in Yunnan Provice (Yuxi, Chuxiong, Dali, and Zhaotong). Hongta's business diversification in- volves 69 enterprises in the fields of finance, ener- gy, transportation, light industry, chemical industry materials, hotel operation, real estate management, etc. Hongta saw sales of its brands reach a high of 278.02 billion, up 1.63% year-on-year, with sales growing rapidly. In particular, Yuxi reached 72.695 billion cigarettes in 2013, up 10.8 billion, or 17.45%, year-on-year. Yuxi maintained its status as the second largest Grade-One brand in China in 2013. The sales of Hongtashan reached a high of 149.13 billion also placing it among the top-level brands that year. In 2014, CT Yunnan actively promoted reorga- nization and integration of its overseas production and marketing platforms, and kept strengthening and regulating management over its production enterprises .CT Yunnan currently has one overseas marketing platform, three overseas production operations based on share holding, and five over- seas joint-venture operations for processing under license. China Tobacco Jiangsu Industrial