JT to Close U.S. Subsidiary for Leaf Purchasing Support

Source from:  Tokyo, Japan, (JCN Newswire) 08/31/2004

Japan Tobacco Inc. (JT) (TSE:2914) announced today that it will close the company's leaf purchasing support subsidiary, JT Proserve Inc. (JTP), located in Raleigh, North Carolina, in the United States, in an effort to continue optimizing the company's overall global leaf purchasing process. The closure of JTP is scheduled to begin in September, 2004. After the acquisition of RJ Reynolds' international tobacco operations in 1999, JT pushed for integration in several areas with respect to the company's leaf purchasing programs for the entire JT group. This includes unification on the tobacco grades being procured, purchasing strategies and overall purchasing methods. In its latest medium-term management plan, "JT PLAN-V," JT also stated that the company would optimize its global tobacco leaf purchasing. In-line with these strategies and in order to expedite decision-making and to establish a more efficient business structure, the entire operational function of JT group's global leaf procurement was integrated into JT International S.A., a wholly owned subsidiary of JT. After completion of the integration process, it was determined that JTP's role in the purchasing of tobacco leaves was no longer necessary and thus the decision was made to close the operation. It is expected that the financial impact of this decision on the company's consolidated accounts will be minimal. About Japan Tobacco Inc. Japan Tobacco Inc. is the world's third largest international manufacturer of tobacco products. The company manufactures internationally recognized cigarette brands including Camel, Winston, Mild Seven and Salem. Since its privatization in 1985, JT has actively diversified its operations into pharmaceuticals and foods. The company's net sales were JPY 4.625 trillion in the fiscal year ended March 31, 2004. JT entered into the pharmaceutical business in 1987 and established Central Pharmaceutical Research Institute in 1993. JT is currently engaged in R&D of new drugs in areas such as metabolic disorders, anti-viral applications, immune disorders, and inflammation. Enditem