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www.datamonitor.com Datamonitor USA
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Global - Tobacco 0199 - 0817 - 2010
© Datamonitor. This profile is a licensed product and is not to be photocopied Page 1
INDUSTRY PROFILE
Global Tobacco
Reference Code: 0199-0817
Publication Date: October 2011
EXECUTIVE SUMMARY
Global - Tobacco 0199 - 0817 - 2010
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EXECUTIVE SUMMARY
Market value
The global tobacco market grew by 4% in 2010 to reach a value of $720,796.9 million.
Market value forecast
In 2015, the global tobacco market is forecast to have a value of $889,275.1 million, an increase of 23.4%
since 2010.
Market segmentation I
Cigarettes is the largest segment of the global tobacco market, accounting for 94.5% of the market's total
value.
Market segmentation II
Asia-Pacific accounts for 50.8% of the global tobacco market value.
Market share
China National Tobacco Corporation is the leading player in the global tobacco market, generating a
36.1% share of the market's value.
Market rivalry
The global tobacco market is concentrated at the top end of the market, with the top three players
collectively accounting for 59.7% of the total market value.
CONTENTS
Global - Tobacco 0199 - 0817 - 2010
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TABLE OF CONTENTS
EXECUTIVE SUMMARY 2
MARKET OVERVIEW 7
Market definition 7
Research highlights 8
Market analysis 9
MARKET VALUE 10
MARKET SEGMENTATION I 11
MARKET SEGMENTATION II 12
MARKET SHARE 13
FIVE FORCES ANALYSIS 14
Summary 14
Buyer power 15
Supplier power 16
New entrants 17
Substitutes 18
Rivalry 19
LEADING COMPANIES 20
China National Tobacco Corporation 20
Philip Morris International Inc. 21
Japan Tobacco Inc. 25
MARKET DISTRIBUTION 29
MARKET FORECASTS 30
Market value forecast 30
APPENDIX 31
Methodology 31
Industry associations 32
Related Datamonitor research 32
Disclaimer 34
CONTENTS
Global - Tobacco 0199 - 0817 - 2010
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ABOUT DATAMONITOR 35
Premium Reports 35
Summary Reports 35
Datamonitor consulting 35
CONTENTS
Global - Tobacco 0199 - 0817 - 2010
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LIST OF TABLES
Table 1: Global tobacco market value: $ million, 2006–10(e) 10
Table 2: Global tobacco market segmentation I:% share, by value, 2010(e) 11
Table 3: Global tobacco market segmentation II: % share, by value, 2010(e) 12
Table 4: Global tobacco market share: % share, by value, 2010(e) 13
Table 5: China National Tobacco Corporation: key facts 20
Table 6: Philip Morris International Inc.: key facts 21
Table 7: Philip Morris International Inc.: key financials ($) 23
Table 8: Philip Morris International Inc.: key financial ratios 23
Table 9: Japan Tobacco Inc.: key facts 25
Table 10: Japan Tobacco Inc.: key financials ($) 26
Table 11: Japan Tobacco Inc.: key financials (¥) 27
Table 12: Japan Tobacco Inc.: key financial ratios 27
Table 13: Global tobacco market distribution: % share, by value, 2010(e) 29
Table 14: Global tobacco market value forecast: $ million, 2010–15 30
CONTENTS
Global - Tobacco 0199 - 0817 - 2010
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LIST OF FIGURES
Figure 1: Global tobacco market value: $ million, 2006–10(e) 10
Figure 2: Global tobacco market segmentation I:% share, by value, 2010(e) 11
Figure 3: Global tobacco market segmentation II: % share, by value, 2010(e) 12
Figure 4: Global tobacco market share: % share, by value, 2010(e) 13
Figure 5: Forces driving competition in the global tobacco market, 2010 14
Figure 6: Drivers of buyer power in the global tobacco market, 2010 15
Figure 7: Drivers of supplier power in the global tobacco market, 2010 16
Figure 8: Factors influencing the likelihood of new entrants in the global tobacco market, 2010 17
Figure 9: Factors influencing the threat of substitutes in the global tobacco market, 2010 18
Figure 10: Drivers of degree of rivalry in the global tobacco market, 2010 19
Figure 11: Philip Morris International Inc.: revenues & profitability 24
Figure 12: Philip Morris International Inc.: assets & liabilities 24
Figure 13: Japan Tobacco Inc.: revenues & profitability 28
Figure 14: Japan Tobacco Inc.: assets & liabilities 28
Figure 15: Global tobacco market distribution: % share, by value, 2010(e) 29
Figure 16: Global tobacco market value forecast: $ million, 2010–15 30
MARKET OVERVIEW
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MARKET OVERVIEW
Market definition
The tobacco market consists of the retail sale of cigarettes, loose tobacco, chewing tobacco, and cigars
and cigarillos. The market is valued according to retail selling price (RSP) and includes any applicable
taxes. Any currency conversions used in the creation of this report have been calculated using constant
2010 annual average exchange rates.
For the purpose of this report, the global market consists of Africa & Middle East, Americas, Europe, and
Asia-Pacific.
Americas comprises Argentina, Brazil, Canada, Chile, Colombia, Mexico, Venezuela, Peru, Uruguay and
the US.
Europe comprises Belgium, the Czech Republic, Denmark, France, Germany, Hungary, Italy, the
Netherlands, Norway, Poland, Romania, Russia, Spain, Sweden, Ukraine, Turkey, Ireland, Greece,
Switzerland, Austria, Portugal, Finland, Croatia, Bulgaria, Lithuania, Latvia, Slovenia, Slovakia, Estonia
and the United Kingdom.
Asia-Pacific comprises Australia, China, Japan, India, Singapore, South Korea, Indonesia, the
Philippines, Thailand, Vietnam, New Zealand, Hong Kong, Malaysia, Pakistan and Taiwan.
Africa & Middle East comprises United Arab Emirates, South Africa, Israel, Egypt, Saudi Arabia, Morocco
and Nigeria.
MARKET OVERVIEW
Global - Tobacco 0199 - 0817 - 2010
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Research highlights
The global tobacco market generated total revenues of $720.8 billion in 2010, representing a compound
annual growth rate (CAGR) of 3.8% for the period spanning 2006-2010.
Cigarettes sales proved the most lucrative for the global tobacco market in 2010, generating total
revenues of $681.1 billion, equivalent to 94.5% of the market's overall value.
The performance of the market is forecast to accelerate, with an anticipated CAGR of 4.3% for the five-
year period 2010-2015, which is expected to drive the market to a value of $889.3 billion by the end of
2015.
MARKET OVERVIEW
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Market analysis
The global tobacco market grew at a steady rate during the period 2006-2010, as a result of steady sales
growth in the cigarettes category. Although the overall market growth is expected to accelerate in the
forecast period, the annual rate of growth is set to fall from a high of 4.6% in 2014 to a low of 3.9% in
2015.
The global tobacco market generated total revenues of $720.8 billion in 2010, representing a compound
annual growth rate (CAGR) of 3.8% for the period spanning 2006-2010. In comparison, the Americas and
Asia-Pacific markets grew with CAGRs of 2.5% and 4.9% respectively, over the same period, to reach
respective values of $121 billion and $366.3 billion in 2010.
Cigarettes sales proved the most lucrative for the global tobacco market in 2010, generating total
revenues of $681.1 billion, equivalent to 94.5% of the market's overall value. In comparison, sales of
loose tobacco generated revenues of $17.9 billion in 2010, equating to 2.5% of the market's aggregate
revenues.
The performance of the market is forecast to accelerate, with an anticipated CAGR of 4.3% for the five-
year period 2010-2015, which is expected to drive the market to a value of $889.3 billion by the end of
2015. Comparatively, the Americas and Asia-Pacific markets will grow with CAGRs of 2.2% and 5.7%
respectively, over the same period, to reach respective values of $134.8 billion and $482.7 billion in 2015.
MARKET VALUE
Global - Tobacco 0199 - 0817 - 2010
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MARKET VALUE
The global tobacco market grew by 4% in 2010 to reach a value of $720,796.9 million.
The compound annual growth rate of the market in the period 2006–10 was 3.8%.
Table 1: Global tobacco market value: $ million, 2006–10(e)
Year $ million € million % Growth
2006 622,007.1 468,417.6
2007 644,154.6 485,096.4 3.6
2008 666,919.2 502,239.8 3.5
2009 692,944.2 521,838.6 3.9
2010(e) 720,796.9 542,813.7 4.0
CAGR: 2006–10 3.8%
Source: Datamonitor D A T A M O N I T O R
Figure 1: Global tobacco market value: $ million, 2006–10(e)
Source: Datamonitor D A T A M O N I T O R
MARKET SEGMENTATION I
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MARKET SEGMENTATION I
Cigarettes is the largest segment of the global tobacco market, accounting for 94.5% of the market's total
value.
The loose tobacco segment accounts for a further 2.5% of the market.
Table 2: Global tobacco market segmentation I:% share, by value, 2010(e)
Category % Share
Cigarettes 94.5%
Loose tobacco 2.5%
Chewing tobacco 1.7%
Cigars and Cigarillos 1.3%
Total 100%
Source: Datamonitor D A T A M O N I T O R
Figure 2: Global tobacco market segmentation I:% share, by value, 2010(e)
Source: Datamonitor D A T A M O N I T O R
MARKET SEGMENTATION II
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MARKET SEGMENTATION II
Asia-Pacific accounts for 50.8% of the global tobacco market value.
Europe accounts for a further 30.3% of the global market.
Table 3: Global tobacco market segmentation II: % share, by value, 2010(e)
Category % Share
Asia-Pacific 50.8%
Europe 30.3%
Americas 16.8%
Africa and Middle East 2.1%
Total 100%
Source: Datamonitor D A T A M O N I T O R
Figure 3: Global tobacco market segmentation II: % share, by value, 2010(e)
Source: Datamonitor D A T A M O N I T O R
MARKET SHARE
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MARKET SHARE
China National Tobacco Corporation is the leading player in the global tobacco market, generating a
36.1% share of the market's value.
Philip Morris International Inc. accounts for a further 14.2% of the market.
Table 4: Global tobacco market share: % share, by value, 2010(e)
Company % Share
China National Tobacco Corporation 36.1%
Philip Morris International Inc. 14.2%
Japan Tobacco Inc. 9.4%
Others 40.3%
Total 100%
Source: Datamonitor D A T A M O N I T O R
Figure 4: Global tobacco market share: % share, by value, 2010(e)
Source: Datamonitor D A T A M O N I T O R
FIVE FORCES ANALYSIS
Global - Tobacco 0199 - 0817 - 2010
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FIVE FORCES ANALYSIS
The tobacco market will be analyzed taking tobacco manufacturers as players. The key buyers will be
taken as retailers, and tobacco leaf farmers and other raw material suppliers as the key suppliers.
Summary
Figure 5: Forces driving competition in the global tobacco market, 2010
Source: Datamonitor D A T A M O N I T O R
The global tobacco market is concentrated at the top end of the market, with the top three players
collectively accounting for 59.7% of the total market value.
The global tobacco market has seen relatively strong market growth, despite strengthening legislation and
government regulation with regards to smoking in many markets. Due to the dominance of large players
such as China National Tobacco, Japan Tobacco, and Philip Morris International, coupled with advertising
restrictions in many markets, new entrants would find it increasingly difficult to establish a brand.
Furthermore, because of the health implications associated with tobacco products, there are a number of
benefits to consumers from using substitutes, which is why there is a moderate threat from substitute non-
durable goods in this market. Rivalry in the market is boosted by the lack of product differentiation and the
pressure placed on market players by the illicit cigarette trade.
FIVE FORCES ANALYSIS
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Buyer power
Figure 6: Drivers of buyer power in the global tobacco market, 2010
Source: Datamonitor D A T A M O N I T O R
The retailers are considered as buyers in the tobacco market. The main retailers for the global tobacco
market include independent retailers, supermarkets/hypermarkets, and convenience stores. The
concentration of retail outlets is relatively fragmented in the tobacco market, as there are a number of
outlets where the products can be sold. In the global market, independent retailers are the most
dominant distribution channel, with a total share of 17.6%. Increasing excise duties on tobacco products
are likely to reduce the demand for tobacco products, which could result in retailers reducing their stocks,
and in-turn increase buyer power. Furthermore, tobacco products are just one of many products sold by
most retailers, which illustrates that in most cases retailers are not reliant upon tobacco sales, which
increases buyer power. Customers are likely to be loyal towards certain brands, so there is potentially
some pull-through of end-consumer demand on retailers, this decreases buyer power to some extent.
Overall, the buyer power in this market is moderate.
FIVE FORCES ANALYSIS
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Supplier power
Figure 7: Drivers of supplier power in the global tobacco market, 2010
Source: Datamonitor D A T A M O N I T O R
Tobacco is an agricultural product and therefore key suppliers to the tobacco market include tobacco leaf
farmers. These farmers lack power in the supply chain because of their smaller size, with many farms
being family run businesses, particularly those in developing countries. Further inputs to the market
include processing aids, humectants (which keep the tobacco moist and pliable), preservatives and
brand-specific flavors. Companies such as Alcan Packaging, who are a leading global manufacturer of
tobacco packaging, are key suppliers to the tobacco market. Alcan's inputs include in-line rotogravure
printed hinge-lid blanks and soft packs. They are also the world's largest supplier of RYO (Roll Your Own)
tobacco booklet covers, as well as printed OPP film (Oriented Polypropylene film), bundle wraps and
tobacco pouches. Another global tobacco packaging supplier is Amcor. Due to the relative size of these
suppliers, their respective influence over the market is increased. There are limited alternative raw
materials in this market, so players are unlikely to switch a supplier, which increases supplier power.
Overall, supplier power is moderate.
FIVE FORCES ANALYSIS
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New entrants
Figure 8: Factors influencing the likelihood of new entrants in the global tobacco market, 2010
Source: Datamonitor D A T A M O N I T O R
The markets for tobacco products in many countries are very concentrated, and have strong existing
brands which would make it very difficult for a new player to enter. This dominance of existing brands is
notable, with leading players such as Philip Morris International (whose brands include Marlboro and
L&M) and Japan Tobacco (whose brands include: Camel, Winston, Silk Cut etc.), having presence in over
120 countries worldwide. Furthermore, shelf-space in retail outlets is finite and retailers may be unwilling
to stock products of an entirely new, unproven brand. Legislation and government regulation with regards
to smoking also continues to grow, for example, bans on smoking in public places, stricter age restrictions
and pictorial health warnings have been adopted in a number of markets, which act as a further deterrent
to new entrants. In countries that are part of the European Union, and Australia, cigarette packs must be
labeled with statutory warning statements such as “SMOKING KILLS". Current tobacco control strategies
seek primarily to decrease the demand for cigarettes through measures that encourage individuals to
adopt healthier behaviors, thus raising entry barriers. Despite growing regulation and the enforcement of
smoking bans, there are large variations to the extent of these within specific markets. Furthermore, there
are restrictions on the advertisement of tobacco products in many markets, which makes it increasingly
difficult for new entrants to create brand awareness. Healthy market growth may encourage new entrants
in the global market. Overall, there is a weak threat from new entrants in the global market.
FIVE FORCES ANALYSIS
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Substitutes
Figure 9: Factors influencing the threat of substitutes in the global tobacco market, 2010
Source: Datamonitor D A T A M O N I T O R
Substitutes in the tobacco market may include various non-durable consumer goods, for example nicotine
gum, nicotine patches, and herbal cigarettes. However, there are inter-segmental substitutes apparent
within this market, alternatives to cigarettes and fine cut tobacco products include smokeless tobacco,
cigars and pipe tobacco. Players and consumers alike may substitute one tobacco product for another,
with players who specialize in the manufacture of cigarettes diversifying into cigars for example. However,
inter-segmental substitution still involves essentially the same product. The benefits of substituting
tobacco products for alternate non-durable consumer goods are especially notable largely due to the
health implications associated with smoking (e.g. increased risk of lung cancer, heart disease etc.).
Furthermore, because of the addictive quality of nicotine present in tobacco products, many smokers who
want to quit, attempt to do so by substituting tobacco products for products such as nicotine gum, or
patches. These products fulfill the consumer's need for nicotine, without the harmful effects of inhaling
smoke. Unlike tobacco products, which face restrictions on advertising in many markets, nicotine
replacement products are highly promoted through a range of media. Overall, there is a moderate threat
from substitutes in the global tobacco market.
FIVE FORCES ANALYSIS
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Rivalry
Figure 10: Drivers of degree of rivalry in the global tobacco market, 2010
Source: Datamonitor D A T A M O N I T O R
The global tobacco market is fairly concentrated, with the major players such as China National Tobacco,
Japan Tobacco, and Philip Morris International collectively holding 59.7% of the total market value.
Product differentiation is essentially limited between the core tobacco products, which include chewing
tobacco, cigars and cigarillos, cigarettes and loose tobacco. Consequently, this increases rivalry. Illicit
tobacco supplies impact upon players' revenues and it is estimated that over 10% of the annual global
tobacco consumption (around 600 billion cigarettes) is supplied by smuggled or counterfeit trade, which
will serve to boost rivalry. Market growth is relatively steady in the global market, which serves to ease
rivalry between players to an extent. Overall, there is a moderate degree of rivalry in the global tobacco
market.
LEADING COMPANIES
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LEADING COMPANIES
China National Tobacco Corporation
Table 5: China National Tobacco Corporation: key facts
Head office: No. 26 B. Xuwumenwai, Xi Da Jie, Xuanwu District, Beijing, 100053, CHN
Telephone: 86 10 6360 5000
Fax: 86 10 6360 5036
Website: www.tobacco.gov.cn
Source: company website D A T A M O N I T O R
China National Tobacco Corporation (CNTC) is a state-owned company engaged in the manufacture and
sale of tobacco products in the Chinese and foreign markets. The company is headquartered in Beijing,
China.
CNTC produces and owns a portfolio of over 900 brands, of which Hongtashan is the company’s key
cigarette brand. The company, through a partnership agreement with Philip Morris, produces and sells the
Marlboro brand in the Chinese market. The company also markets its own brands such as RGD,
Harmony and Dubliss through Philip Morris in the overseas markets including Central Europe, Eastern
Europe and Latin America. CNTC also produces and markets foreign brands such as 555 (British
American Tobacco plc), Kool (R.J. Reynolds Tobacco Company), Camel (R.J. Reynolds Tobacco
Company) and Lucky Strike (American Tobacco Company), in the Chinese market through license
agreements with the respective manufacturers.
In addition, the company contracts out orders to smaller, local factories. In turn these factories fill orders
and deliver them for distribution to CNTC’s distribution chain.
In November 2010, the company planned to reduce the no. of its cigarette operating brands to 20 in order
to make them the top global brands.
In December 2010, China Kangtai Cactus Biotech Inc., engaged in production and marketing of cactus
based products entered into an agreement with China Tobacco Import and Export Shandong Corp., a
subsidiary of China National Tobacco Corp., to manufacture cactus cigarettes under the name of "Tai
Shan Sheng Chao."
Key Metrics
As the company is state-owned, financial information is not available.
LEADING COMPANIES
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Philip Morris International Inc.
Table 6: Philip Morris International Inc.: key facts
Head office: 120 Park Avenue, New York City, New York 10017, USA
Telephone: 1 917 663 2000
Website: www.philipmorrisinternational.com
Financial year-end: December
Ticker: PM
Stock exchange: New York
Source: company website D A T A M O N I T O R
Philip Morris International (PMI) is engaged in the manufacture and sale of cigarettes and other tobacco
products. The company’s products are sold in over 180 countries under various brand names that include
Marlboro, Philip Morris, and Red & White. PMI is headquartered in New York City, New York.
Prior to March 2008, PMI was a wholly owned subsidiary of Altria Group. In 2008, Altria Group (Altria)
spun-off 100% of the shares of PMI to Altria’s shareholders, transforming PMI into a publicly traded
tobacco company. The company owns the trademark rights for all its principal brands, including Marlboro,
in all the countries other than the US. PM USA (a subsidiary of Altria) owns the trademark rights to its
brands, including Marlboro, within the US.
The company operates through four business segments that are organized according to the geographic
regions. These include the European Union (EU); Eastern Europe, Middle East and Africa (EEMA); Asia;
and Latin America & Canada.
The European Union (EU) segment is headquartered in Lausanne, Switzerland and covers all the EU
countries excluding Slovenia, Bulgaria and Romania, and also comprises Switzerland, Norway and
Iceland, which are linked to the EU through trade agreements.
The Eastern Europe, Middle East and Africa (EEMA) segment is also headquartered in Lausanne and
covers the Balkans (including Slovenia, Bulgaria and Romania), the former Soviet Union (excluding
Estonia, Latvia and Lithuania), Mongolia, Turkey, the Middle East and Africa and its international duty free
business..
The Asia segment is headquartered in Hong Kong and covers all the Asian countries as well as Australia,
New Zealand, and the Pacific Islands.
LEADING COMPANIES
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The Latin America & Canada segment is headquartered in New York and covers the South American
continent, Central America, Mexico, the Caribbean and Canada. In 2009, the company sold 103.8 million
units of cigarettes in the Latin American and Canadian region.
PMI’s product portfolio includes a wide range of premium, mid-price, and low-priced brands that
comprises both international and local brands. The company’s premium-priced products are marketed
under Marlboro, Merit, Parliament and Virginia Slims. Its mid-priced products are marketed under L&M
and Chesterfield brand names. PMI’s low-priced category products comprise Bond Street, Lark, Muratti,
Next, Philip Morris and Red & White brands.
PMI also owns a number of local brands such as Sampoerna A, Sampoerna Hijau and Dji Sam Soe in
Indonesia; Diana in Italy; Optima and Apollo-Soyuz in Russia; Morven Gold in Pakistan; Boston in
Colombia; Belmont, Canadian Classics and Number 7 in Canada; Best and Classic in Serbia; f6 in
Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia.
The company owns 58 manufacturing facilities across various geographies, out of which 11 facilities are
located in the European Union region, 10 facilities in the Eastern Europe, Middle East and Africa (EEMA)
region, 17 facilities in the Asia region, and 20 facilities located in the Latin America and Canada region.
The company witnessed a series of product launches in 2008 and 2009, some of which were Marlboro
Gold Touch in Italy; Marlboro Filter Plus Extra in Romania; Marlboro Black Menthol in Japan; A Volution in
Indonesia; Lark Classic Milds, Lark Mint Splash and Lark Black Label in Japan; and Marlboro Fresh in
Mexico.
PMI also undertook acquisitions during the year 2009. In September 2009, the company entered into a
joint venture agreement with Swedish Match AB. Earlier, in July 2009, PMI entered into an agreement to
acquire 100% stake in the privately-owned Colombian cigarette manufacturer, Productora Tabacalera de
Colombia, Protabaco, Ltda. for $452 million.
In 2010, PMI announced an agreement with Fortune Tobacco Corporation in Philippines to unite their
respective business activities to form a new company called PMFTC.
Key Metrics
The company recorded revenues of $67.7 billion in the financial year (FY) ended December 2010, an
increase of 9.1% over FY2009. The net profit of the company was $7.3 billion in FY2010, an increase of
14.5% over FY2009.
During FY2010, the European Union division recorded revenues of $28.1 billion, a decrease of 1.8% over
2009.
LEADING COMPANIES
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The Eastern Europe, Middle East Africa division recorded revenues of $15.9 billion in FY2010, an
increase of 14.9% over 2009.
The Asia division recorded revenues of $15.2 billion in FY2010, an increase of 22.7% over 2009.
The Latin America & Canada division recorded revenues of $8.5 billion in FY2010, an increase of 17.2%
over 2009.
Table 7: Philip Morris International Inc.: key financials ($)
$ million 2006 2007 2008 2009 2010
Revenues 48,302.0 55,243.0 63,640.0 62,080.0 67,713.0
Net income (loss) 6,130.0 6,038.0 6,890.0 6,342.0 7,259.0
Total assets 26,120.0 31,777.0 32,972.0 34,552.0 35,050.0
Total liabilities 11,853.0 16,182.0 25,472.0 28,407.0 29,929.0
Employees 74,200 75,500 75,600 77,300 78,300
Source: company filings D A T A M O N I T O R
Table 8: Philip Morris International Inc.: key financial ratios
Ratio 2006 2007 2008 2009 2010
Profit margin 12.7% 10.9% 10.8% 10.2% 10.7%
Revenue growth 6.6% 14.4% 15.2% (2.5%) 9.1%
Asset growth 12.9% 21.7% 3.8% 4.8% 1.4%
Liabilities growth (7.6%) 36.5% 57.4% 11.5% 5.4%
Debt/asset ratio 45.4% 50.9% 77.3% 82.2% 85.4%
Return on assets 24.9% 20.9% 21.3% 18.8% 20.9%
Revenue per employee $650,970 $731,695 $841,799 $803,105 $864,789
Profit per employee $82,615 $79,974 $91,138 $82,044 $92,708
Source: company filings D A T A M O N I T O R
LEADING COMPANIES
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Figure 11: Philip Morris International Inc.: revenues & profitability
Source: company filings D A T A M O N I T O R
Figure 12: Philip Morris International Inc.: assets & liabilities
Source: company filings D A T A M O N I T O R
LEADING COMPANIES
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Japan Tobacco Inc.
Table 9: Japan Tobacco Inc.: key facts
Head office: 2-1 Toranomon 2-chome, Minato-ku, Tokyo 105 8422, JPN
Telephone: 81 3 3582 3111
Fax: 81 3 5572 1441
Website: www.jt.com
Financial year-end: March
Ticker: 2914
Stock exchange: Tokyo
Source: company website D A T A M O N I T O R
Japan Tobacco (JT) is primarily engaged in the manufacture and sale of tobacco products in the domestic
and international markets. The company is also engaged in pharmaceuticals, processed foods and
beverages businesses. JT has 274 subsidiaries and has operations in Japan, the Netherlands, Canada,
Switzerland, France, Germany, China, Hong Kong, Macau, Canada, Russia, the Middle East and Africa.
The company operates through five business segments: domestic tobacco, international tobacco, foods,
pharmaceuticals, and others. The company owns and operates 31 plants in 23 locations.
The domestic tobacco segment manufactures and markets cigarette products to retail stores all over
Japan. The company holds approximately two-thirds of the domestic Japanese tobacco market. The
segment’s key brands include Mild Seven, Seven Stars, Pianissimo, Cabin, Caster, Camel, Peace and
Hope. The domestic tobacco segment also includes revenues generated through its subsidiary TS
Network Company. TS Network Company imports tobacco products from foreign tobacco manufacturers
and markets in Japan.
The international tobacco segment manufactures and sells cigarettes in the overseas market under the
brands Winston, Camel and Mild Seven, Benson & Hedges, Silk Cut, LD, Sobranie and Glamour (through
the acquisition of the Gallaher Group). The other key brands include Hamlet cigars, Old Holborn and
Amber Leaf and Gustavus Snus. The international segment operates through the company’s subsidiary
JT International (JTI) and other consolidated subsidiaries of JT International Holding. The company’s
international tobacco segment operates in 120 countries.
In Russia, JTI invested $100 million in 2007-08 to expand production facilities in its plants. The key
brands in Russia include Camel, Winston, LD, Glamour, Pyotr I, Russky Stil and Troika. In 2008, the
company introduced Mild Seven Impact One 100's in the Japanese market. In May 2009, the company
LEADING COMPANIES
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launched Camel Snuff in the Swedish market. In May 2010, Japan Tobacco launched smokeless
cigarettes under the Zero Style brand name.
The foods segment manufactures and sells processed foods, beverages and seasonings. This segment
operates through the company's subsidiaries, Katokichi Co., Saint-Germain Co., Japan Beverage and Fuji
Foods. In May 2010, the company launched a tea sports drink in the Japanese market under the JT brand
name.
The pharmaceuticals segment is engaged in the research and development, manufacture and distribution
of prescription drugs. In the domestic market, JT operates through subsidiary Torii Pharmaceutical, which
manufactures and sells prescription drugs using its marketing network.
The others segment includes real estate business, engineering business, logistics and other operations.
In May 2011, Japan Tobacco planned to scrap 23 cigarette brands in order to stabilize the supply chains
disrupted by the earthquake and tsunami in northeastern Japan. In the same month the company decided
to close its Hainburg factory in Austria.
In July 2011, Japan Tobacco invested to start a tobacco production plant in Tajikistan.
In August 2011, Japan Tobacco, Incsigned an agreement to acquire Haggar Cigarette & Tobacco
Factory, Ltd, a company dealing in cigarettes and other tobacco products for $450 million.
Key Metrics
The company recorded revenues of $70.5 billion in the financial year (FY) ended March 2011, an
increase of 1% over FY2010. The net profit of the company was $1.7 billion in FY2011, an increase of
4.7% over FY2010.
Table 10: Japan Tobacco Inc.: key financials ($)
$ million 2007 2008 2009 2010 2011
Revenues 54,303.2 72,979.8 77,791.1 69,848.3 70,529.8
Net income (loss) 2,399.8 2,717.9 1,405.1 1,576.3 1,650.5
Total assets 38,309.3 57,921.9 44,174.6 44,092.5 40,669.0
Total liabilities 15,257.5 33,389.7 25,680.6 24,471.6 22,551.9
Employees 33,428 47,459 47,977 49,665 48,472
Source: company filings D A T A M O N I T O R
LEADING COMPANIES
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Table 11: Japan Tobacco Inc.: key financials (¥)
¥ million 2007 2008 2009 2010 2011
Revenues 4,769,387.0 6,409,730.0 6,832,307.0 6,134,695.0 6,194,550.0
Net income (loss) 210,772.0 238,710.0 123,410.0 138,448.0 144,960.0
Total assets 3,364,663.0 5,087,210.0 3,879,800.0 3,872,590.0 3,571,910.0
Total liabilities 1,340,047.0 2,932,580.0 2,255,500.0 2,149,310.0 1,980,710.0
Source: company filings D A T A M O N I T O R
Table 12: Japan Tobacco Inc.: key financial ratios
Ratio 2007 2008 2009 2010 2011
Profit margin 4.4% 3.7% 1.8% 2.3% 2.3%
Revenue growth 2.8% 34.4% 6.6% (10.2%) 1.0%
Asset growth 10.8% 51.2% (23.7%) (0.2%) (7.8%)
Liabilities growth 10.1% 118.8% (23.1%) (4.7%) (7.8%)
Debt/asset ratio 39.8% 57.6% 58.1% 55.5% 55.5%
Return on assets 6.6% 5.6% 2.8% 3.6% 3.9%
Revenue per employee $1,624,482 $1,537,744 $1,621,426 $1,406,389 $1,455,062
Profit per employee $71,790 $57,268 $29,287 $31,739 $34,050
Source: company filings D A T A M O N I T O R
LEADING COMPANIES
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Figure 13: Japan Tobacco Inc.: revenues & profitability
Source: company filings D A T A M O N I T O R
Figure 14: Japan Tobacco Inc.: assets & liabilities
Source: company filings D A T A M O N I T O R
DISTRIBUTION
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MARKET DISTRIBUTION
Independent Retailers form the leading distribution channel in the global tobacco market, accounting for a
17.6% share of the total market's value.
Supermarkets / hypermarkets accounts for a further 14% of the market.
Table 13: Global tobacco market distribution: % share, by value, 2010(e)
Channel % Share
Independent Retailers 17.6%
Supermarkets / hypermarkets 14.0%
Convenience Stores 11.2%
Others 57.3%
Total 100%
Source: Datamonitor D A T A M O N I T O R
Figure 15: Global tobacco market distribution: % share, by value, 2010(e)
Source: Datamonitor D A T A M O N I T O R
MARKET FORECASTS
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MARKET FORECASTS
Market value forecast
In 2015, the global tobacco market is forecast to have a value of $889,275.1 million, an increase of 23.4%
since 2010.
The compound annual growth rate of the market in the period 2010–15 is predicted to be 4.3%.
Table 14: Global tobacco market value forecast: $ million, 2010–15
Year $ million € million % Growth
2010 720,796.9 542,813.7 4.0%
2011 750,716.8 565,345.6 4.2%
2012 782,914.8 589,593.1 4.3%
2013 817,774.8 615,845.3 4.5%
2014 855,579.5 644,315.0 4.6%
2015 889,275.1 669,690.3 3.9%
CAGR: 2010–15 4.3%
Source: Datamonitor D A T A M O N I T O R
Figure 16: Global tobacco market value forecast: $ million, 2010–15
Source: Datamonitor D A T A M O N I T O R
APPENDIX
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APPENDIX
Methodology
Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated,
analyzed, cross-checked and presented in a consistent and accessible style.
Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys
and supported by analysis from industry experts using highly complex modeling & forecasting tools,
Datamonitor’s in-house databases provide the foundation for all related industry profiles
Preparatory research – We also maintain extensive in-house databases of news, analyst
commentary, company profiles and macroeconomic & demographic information, which enable our
researchers to build an accurate market overview
Definitions – Market definitions are standardized to allow comparison from country to country. The
parameters of each definition are carefully reviewed at the start of the research process to ensure they
match the requirements of both the market and our clients
Extensive secondary research activities ensure we are always fully up-to-date with the latest
industry events and trends
Datamonitor aggregates and analyzes a number of secondary information sources, including:
- National/Governmental statistics
- International data (official international sources)
- National and International trade associations
- Broker and analyst reports
- Company Annual Reports
- Business information libraries and databases
Modeling & forecasting tools – Datamonitor has developed powerful tools that allow quantitative
and qualitative data to be combined with related macroeconomic and demographic drivers to create
market models and forecasts, which can then be refined according to specific competitive, regulatory
and demand-related factors
Continuous quality control ensures that our processes and profiles remain focused, accurate and
up-to-date
APPENDIX
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Industry associations
International Tobacco Growers' Association
No. 30 - A, 1º dtº, 6000-081 Castelo Branco, Portugal
Tel.: 351 272 325 901
Fax: 351 272 325 906
www.tobaccoleaf.org
Related Datamonitor research
Industry Profiles
Tobacco in the United States
Tobacco in Canada
Tobacco in Mexico
Tobacco in Brazil
Tobacco in France
Tobacco in Germany
Tobacco in the United Kingdom
Tobacco in Belgium
Tobacco in Italy
Tobacco in the Netherlands
Tobacco in Spain
Tobacco in the Czech Republic
Tobacco in Denmark
Tobacco in Hungary
Tobacco in Norway
Tobacco in Russia
Tobacco in Poland
Tobacco in Sweden
Tobacco in Europe
Tobacco in Australia
APPENDIX
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Tobacco in China
Tobacco in India
Tobacco in Japan
Tobacco in Singapore
Tobacco in South Korea
Tobacco in Taiwan
Tobacco in Asia-Pacific
Tobacco in South Africa
APPENDIX
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Disclaimer
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