JT to Realign Domestic Leaf Tobacco Division

Source from:  Tokyo, July 26, 2005 jti.co.jp 08/01/2005

Japan Tobacco Inc. (JT) (TSE: 2914) announced today that the company plans to realign its domestic leaf tobacco division as one measure for improving cost competitiveness and optimizing the JT organization. This realignment is in response to the tough market conditions in the domestic tobacco business and the changing environment in domestic leaf tobacco cultivation, including the decline of acreage and number of growers, as a result of the company專 proposal that asked if growers would volunteer to terminate their tobacco cultivation last year. JT reviewed the present structure of the six Regional Leaf Tobacco Headquarters, which are responsible for procuring leaf tobacco in each region, four Regional Leaf Tobacco Offices and one Local Leaf Tobacco Office, which are branch offices of the Regional Leaf Tobacco Headquarters. All four Regional Leaf Tobacco Offices and the one Local Leaf Tobacco Office will be closed while the six Regional Leaf Tobacco Headquarters will be maintained. In addition, the Sukagawa and Kumamoto leaf processing factories, which are located on the same site as the Regional Leaf Tobacco Headquarters, will be integrated into the Naka-Nihon Regional Leaf Tobacco Headquarters and the Kyushu Regional Leaf Tobacco Headquarters, respectively. Moreover, a total of 33 Leaf Tobacco Procurement Stations and five Leaf Tobacco Procurement Centers, which are facilities that JT uses to purchase leaf tobacco from domestic tobacco growers were also reviewed. The closure of 16 Leaf Tobacco Procurement Stations at the end of March 2006 was already announced, but JT decided to close four additional Leaf Tobacco Procurement Stations at the same time. Thus, under the new structure, the company will use 13 Stations and five Leaf Tobacco Procurement Centers to purchase leaf tobacco from domestic growers. Along with the above measures, the Leaf Tobacco Research Center in Oyama, which carries out research and development on leaf tobacco will integrate two Leaf Tobacco Technology Centers in Morioka and Kagoshima, which have been researching and developing the technologies relating to the variety-specific characteristics of leaf tobacco. The new structure will take effect in April 2006. Enditem