Key Tobacco Manufacturer Focuses on Developing Leading Brands

12/31/2005

Nanchang General Cigarette Factory in south central China's Jiangxi Province - reincorporated on the basis of the merger of three local cigarette factories - is focusing energy on the development of its two leading cigarette brands of Jinsheng and Mount Lushan. Previously, there were five cigarette factories in Jiangxi - Nanchang Cigarette Factory, Gannan Cigarette Factory, Guangfeng Cigarette Factory, Jinggangshan Cigarette Factory and Xingguo Cigarette Factory. In a fundamental structural reform of China's tobacco industry initiated by the State Tobacco Monopoly Administration (STMA) in 2001, the former Nanchang Cigarette Factory, Jinggangshan Cigarette Factory and Xingguo Cigarette Factory merged to form Nanchang General Cigarette Factory, with Jinggangshan and Xingguo Cigarette Factories becoming subsidiaries to the former. Since the merger, the reincorporated Nanchang General Cigarette Factory has had unified management over its assets, brands, raw materials purchase and products marketing. Both Jinsheng and Mount Lushan have been included into the Catalogue of Top 100 Chinese Cigarette Brands, issued by the State Tobacco Monopoly Administration (STMA) in August 2004, in a move to reduce the existing number of cigarette brands and improve the structure of cigarette products in China. The merger of the three local cigarette factories to form Nanchang General Cigarette Factory signifies the first step of the tobacco industry of Jiangxi to realize its grand strategy of developing an annual cigarette production capacity of 1 million cases (50 billion cigarettes) and generating 5 billion yuan (616 million U.S. dollars) in taxes and profits annually over the next three years, with Nanchang General Cigarette Factory as the leading tobacco manufacturer and with its Jinsheng brand as the leading competitive cigarette brand. The merger has contributed to further improving the structure of resources of the manufacturing sector of the provincial tobacco industry. After the merger, the annual cigarette production capacity of Nanchang General Cigarette Factory has reached 600,000 cases (30 billion cigarettes). The general cigarette factory has 3.7 billion yuan (4.57 billion U.S. dollars) in fixed assets, and has a total workforce of 2,500. It boasts such competitive brands as Jinsheng and Mount Lushan. In a period of trial operation following the merger in 2005, Nanchang General Cigarette Factory has realized steady growth in both tax payment and profit making. Enditem