Japan Tobacco first industry giant to have Russian assets placed under temporary management
MOSCOW. Nov 5 (Interfax) - Japan Tobacco International (JTI) has become the first global tobacco giant to have its Russian assets placed under the temporary management of a local entity.
According to the decree signed by Russian President Vladimir Putin on November 5, and published on the official portal for legal information, the joint-stock company Promyshlennye Aktivy [Industrial Assets] has been granted management control over the stakes held by JTI entities in the following Russian limited liability companies: JTI Donskoy Tabak, Petro, JTI Yelets, and Kres Neva.
JTI has operated in Russia since its inception in 1999, following Japan Tobacco Inc.'s acquisition of the international business of R.J. Reynolds. In 2007, JTI became the leader of the Russian tobacco market, a position it further solidified in 2018 through the acquisition of Donskoy Tabak.
The Petro facility in St. Petersburg and JTI Donskoy Tabak in Rostov-on-Don manufacture finished tobacco products, while JTI Yelets, in the Lipetsk Region, and Kres Neva, in the Leningrad Region, process raw materials.
The presidential decree provides no further identifying details for the Russian entity other than its name, thus rendering it impossible to determine which specific company registered in Russia as Promyshlennye Aktivy that will now manage JTI's local operations.
The last time the JTI group companies in Russia published financial statements was for 2023.
JTI Donskoy Tabak LLC reported revenue of 10.3 billion rubles and net profit of 1.3 billion rubles for 2023. JTI Yelets LLC reported revenue of 1.25 billion rubles and net profit of 139.9 million rubles. Kres Neva LLC earned 8.5 billion rubles in revenue and 1.28 billion rubles in profit in 2023, while Petro LLC posted 73 billion rubles in revenue and 13.2 billion rubles in profit.
The temporary management mechanism had not previously been applied to the assets of tobacco companies.
The British concern Imperial Brands Plc, which includes Imperial Tobacco, transferred its business in Russia to Russian investors in 2022. The tobacco concern British American Tobacco also sold its assets in Russia to local management in 2023.
As for Philip Morris International, the concern said several years ago that it might restructure its business in Russia, including transferring assets. However, no information on this has appeared since then.
