JTI at a glance
© Copyright JTI 2013
• JT was established in 1985
• In 1999 JT becomes global with the purchase of the international operations of R.J. Reynolds
• JT Group includes Japan’s domestic tobacco market, as well as beverages, seasonings, processed foods and pharmaceutical businesses
• A global Fortune 500 company*
• Over 51,000 employees worldwide, including JTI
• 33.3% owned by the Japanese government, making it the largest shareholder
JTI at a glance 2
Our parent companyThe JT Group
Beverages
Processed foods
Pharmaceuticals
Japanese domestic tobacco
*2013
© Copyright JTI 2013 JTI at a glance 3
JTI today
27,0001
employees (approx.)
364
offices
25factories
8research & development centers
5 tobacco processing facilities
• JTI is the JT Group’s international tobacco business
• We employ people in 73 countries around the world
• We are a leading international tobacco product company created in 1999
• We sold 416.4 billion cigarettes2
• The Company’s core revenue is USD 12,273 million2
© Copyright JTI 2013
1 As of December 2013
2 Jan-Dec 2013
JTI at a glance
A portfolio strongly represented across most price segments
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Our Global Flagship Brand portfolio
JTI at a glance 5
Our ‘Other Tobacco Products’ and ‘Emerging Products’
Roll-your-own, make-your-own
SnusCigars
Ploom
Electronically heated tobacco product that heats tobacco pods to create vapor
Shisha
Investment case
JTI in Serbia
JTI: the first and biggest Japanese investor in Serbia
2003 - JTI opens the
marketing and sales office in Belgrade
2006 - JTI acquires
Tobacco Industry Senta - todayJT International a.d. Senta
Initial investment of USD 45 million
USD 169 million JTI invested so far in Serbia.
Key rationale
• Supplying promising markets of Serbia and West Balkans
Importance of CEFTA
• Free-trade agreement between Serbia, Montenegro, Bosnia & Herzegovina, Albania, (UN Mission in) Kosovo, Macedonia, and Moldova
• Provides 0% customs duty for our exports to Macedonia, Montenegro and Bosnia and Herzegovina
EU trade liberalization
• Preferable customs rates for import of various goods from Serbia envisaged in Stabilization and Association Agreement
JTI exports from Serbia
• Cigarettes to Bosnia and Herzegovina, Montenegro, Macedonia, Croatia and Albania
• Serbian-grown tobacco to the EU
• Total export of cigarettes and tobacco in 2013 worth USD 23,4 million
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Why investing in Serbia?
Senta factory
• Factory in Senta
• West Balkan’s headquarters in Belgrade
• Offices in Bosnia and Herzegovina, Croatia, Albania and Kosovo
JTI in Serbia production base for the Western Balkans7 markets – one EU member and 6 CEFTA parties
*
*The map is without prejudice to positions on status, and is in line with UNSC 1244 and the ICJ Opinion on the Kosovo declaration of independence.
JTI: tax contributor in Serbia
JTI is the 6th largest taxpayer in the country
10
13.6 billion dinars contributed to the state budget in 2013.
JTI growth story
2006
2007
2008
2009
2010
2011
2012
2013
Exp
ecte
d0
5
10
15
20
25
2.33.8
9.8
17.618.5
21.2 21.823.4
JTI Senta export growth
Leaf Cigarettes Total
• Sales volume in Serbia increased by 50% despite significant market contraction
• JTI’s share of market in Serbia increased by over 100% since 2006
Tobacco growing operations in Serbia
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• JTI - a leader in tobacco production in Serbia with market share of 43% in ’12
• JTI cooperates in Serbia with 250 seasonal workers and 180 farmers
• Continuous growth of tobacco production and total yield per hectare
• Over 50% increased tobacco purchase
• 80% increase in contracted tobacco
• Today JTI in Serbia employs over 300 people
• From 2006-2013 JTI generated 200 new jobs
• Engages over 250 seasonal workers
• Internships programs for graduated students (2010 – 2014) - 34 interns
• Skillful and well educated (mostly English-speaking) workforce
Employees – Wheel of our Growth
• Senta factory is first in Serbia to implement Kaizen management process
• Fully accepted by the employees
• Productivity increased by 52%
• Reject ratio reduced by 66%.
• Factory certificated: ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007
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Kaizen
• Continuous dialog with the Government
• Communication maintained on all key aspects of economic legislation development
• Investor-friendly tax regime
• Salary tax rate -10% and corporate profit tax rate – 15%, among the lowest in the Europe
• National treatment of foreign investors
• Serbia’s EU aspirations influencing regulatory environment that is heading towards alignment with EU
• Predictable development of operating environment (e.g. excise calendar in tobacco industry)
Conclusion
• The investment in Serbia proved to be good platform for business expansion of JTI in Serbia and Adriatica region
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Business Environment in Serbia
EnterprisingOpenChallenging