The FINANCIAL — Japan Tobacco International has opened its office for the Caucasus region in Georgia.
The market in the region is growing quite rapidly and the company needs their management team to be close to the market, according to Martin Braddock, JTI Regional President for the CIS+, Romania and Adriatic Region.
“There were several reasons for this decision,” Braddock said. “First of all, the investment and business climate here in Georgia is quite attractive and perspective. We see lots of talented people in Georgia and this is another important reason for opening a regional office in Georgia. The quality of resources available in the country in terms of office, people, and professional skills is quite high.”
JTI was working on opening a regional office in Georgia for a year with the intensive assistance of the Georgian Government. Mikheil Janelidze, Deputy Minister of Economy and Sustainable Developmen,t attended the opening ceremony of the regional office.
“We are glad that JTI will be serving the region from Georgia,” Janelidze said. “This is one of the results of our activities aiming to develop the business climate in the country. Nowadays the Georgian business environment is more than acceptable for international companies including JTI. JTI is one of the fastest-growing companies and we expect them to continue growing in the country and region as well.”
“I’m glad that they have already employed more than 80 individuals. This means that Georgia is not only attractive for its business environment but as an intellectual capital as well,” he added.
Ambassador of Japan to Georgia Mr. Masayoshi Kamohara also positively appreciated the opening of the JTI regional office in Georgia. The Embassy of Japan in Georgia and JTI have been cooperating for three years since the Embassy first opened in Georgia. Mr. Masayoshi Kamohara thanked JTI for their support of some cultural projects as well.
“I am glad that JTI is developing so rapidly in Georgia,” Mr. Masayoshi Kamohara said. “This is already their third office and consequently the number of employees is rising also. I consider this quite a big success. I hope that other Japanese companies will set up their businesses in Georgia thanks to the attractive business environment of the country.”
JTI business in the region is increasing quite fast as all sides have mentioned. Sales in Georgia increased by 4 percent last year, in Azerbaijan – by 63 percent, and in Armenia – by 28 percent.
“As of the end of the first quarter of 2012 we have sold 24 percent more products in Georgia compared to the same period of 2011,” Braddock said. We expect quite a high rise in the future. Therefore opening a regional office was a good move. Now we will able to better meet our customers’ needs and requirements.”
In 2010 JTI increased business in Georgia by 50% compared to 2009. They significantly increased Camel and Winston business.
“We are increasing quite fast and hold quite a large share of the market. We needed our management here to continue this trend of growth,” Braddock explained.
JTI entered the Georgia market in 2000. Currently they hold a 26.5 percent share of the Georgian market. In Azerbaijan they hold 20 percent of the market and in Armenia – 11 percent. Braddock assesses these three markets differently.
“There are four main players in the Azerbaijan market which are Imperial Tobacco, BAT, JTI and European Tobacco. Each of them holds quite a big part of the market. In Armenia the market is totally different. Almost all international tobacco brands are present and many local ones too. The situation is quite tough and the competition there is high. Georgia is somewhere in the middle in terms of its market situation. There are lots of international brands here, but not as many as in Armenia.”
Eliz Group Ltd is the official distributor of JTI in Georgia. They contributed 102.4 million GEL to the budget as excise tax in 2011. Since 2006 they have added more than 400 million GEL to the budget.
“Eliz Group is not only our partner in Georgia, but a successful Georgian company as well. They manage to generate quite high profit,” he added.
The prices of tobacco in Georgia are lower compared to the European countries. Braddock predicts rising tobacco prices in the future throughout the whole world, but the company doesn’t have any concrete plan in this direction. The increasing process is because of two reasons including rising price of excises and governmental policies.
JTI is the international tobacco division of Japan Tobacco Inc., a leading international tobacco product manufacturer, with a global market share of almost 10 percent. The company was formed in 1999 when Japan Tobacco Inc. purchased, for 7.8 billion USD, the international tobacco operations of the US multinational R.J. Reynolds. They employ up to 25,000 employees all over the world. JTI brands are sold in 120 countries. The company has 24 factories producing cigarettes.