China: Cigarette Factories Cooperate in Development of Brands, Production

Source from:  Hanzhong Cigarette Factory No. 2 08/03/2004

Changsha Cigarette Factory in south central China's Hunan Province and Hanzhong Cigarette Factory No. 2 in northwest China's Shaanxi Province are cooperating in the development of cigarette brands and cigarette production. Under a contract signed between the two sides, Changsha Cigarette Factory will assist Hanzhong Cigarette Factory No. 2 in improving the structure of its cigarette brands and conducting technical transformation to strengthen and enlarge its cigarette production and profit-making capacity. During the period of cooperation, Hanzhong Cigarette Factory No. 2 will mainly be producing Grade Two, Grade Three and Grade Four cigarettes and Changsha Cigarette Factory may license Hanzhong Cigarette Factory No. 2 to produce high-quality cigarettes using its highly competitive Baisha brand. On the basis of cooperation in the development of brands and cigarette production, the two sides are expected to further cooperate in assets development through corporate reorganization, merger, acquisition or shareholding. On July 15, Deputy Director Liu Jianfu of Changsha Cigarette Factory led a delegation to visit Hanzhong Cigarette Factory No. 2 to exchange opinions with the leadership of Hanzhong Cigarette Factory No. 2 on bilaterial cooperation. As a result, the two sides reached greater consensus on a broad range of issues concerning bilateral cooperation. In implementation of the cooperation contract between the two sides, Hanzhong Cigarette Factory No. 2 will conduct large-scale technical transformation and modify its quality control system under a technical transformation plan jointly formulated with Changsha Cigarette Factory. With the approval of this technical transformation plan by the State Tobacco Monopoly Administration (STMA), Changsha Cigarette Factory – which is one of the 36 key Chinese tobacco manufacturers designated by the STMA – will extend support in technology, equipment and designing to Hanzhong Cigarette Factory No. 2. Besides, Hanzhong Cigarette Factory No. 2 will manage to revise its quality control standards under the ISO9000 quality assurance systems. Enditem