China's Tobacco Industry Maintains Relatively High Growth Rate

11/22/2007

The tobacco industry of China maintained a relatively high growth rate in the first nine months of 2007, with both cigarette production and sales going up year-on-year, with key cigarette brands in a favorable trend of development, and with the economic efficiency in sustainable growth, though the inventory-to-sales ratio of some cigarette brands remained relatively high. In September alone, both cigarette production and sales on the part of China's tobacco industry went up year-on-year while cigarette inventories remained relatively high. The production of higher grade cigarettes continued to increase relatively rapidly, and the economic efficiency of the tobacco industry remained at a relatively high level. CIGARETTE PRODUCTION In September alone, the tobacco industry of China produced 209.98 billion cigarettes (4.1996 million cases) destined for the domestic market, an increase of 32.11 billion cigarettes (642,200 cases), or 18.1 percent, over the level of 177.87 billion cigarettes (3.5574 million cases) in the same month of 2006. From January to September, the tobacco industry of China produced 1,662.18 billion cigarettes (33.2436 million cases) destined for the domestic market, an increase of 129.48 billion cigarettes (2.5896 million cases), or 8.4 percent, over the level of 1,532.7 billion cigarettes (30.654 million cases) in the same period of 2006. In the nine-month period, the output of Grade One and Grade Two cigarettes respectively went up 45.11 percent and 39.03 percent year-on-year. The proportion of Grade Five cigarettes in the total cigarette output in China in the nine-month period was 31.2 percent, down 5 percent from the same period of 2006, and the proportion of Grade Four cigarettes was down 1.2 percent year-on-year. CIGARETTE SALES In September alone, the tobacco industry of China sold 194.25 billion cigarettes (3.885 million cases), an increase of 16.2 billion cigarettes (324,000 cases), or 9.1 percent, over the level of 178.05 billion cigarettes (3.561 million cases) in the same month of 2006. From January to September, the tobacco industry of China sold 1,637 billion cigarettes (32.74 million cases), an increase of 82.15 billion cigarettes (1.643 million cases), or 5.3 percent, over the level of 1,554.85 billion cigarettes (31.097 million cases) in the same period of 2006. CIGARETTE INVENTORIES At the end of September, the cigarette inventories held by the tobacco industry of China reached 146.1 billion cigarettes (2.922 million cases), an increase of 24.75 billion cigarettes (495,000 cases), or 20.4 percent, over the level of 121.35 billion cigarettes (2.427 million cases) at the same time of 2006. Also at the end of September, the inventory-to-sales ratio of Grade One cigarettes on the part of the commercial sector of the tobacco industry of China was 0.57, on a par with the level of 0.57 at the same time of 2006; Grade Two cigarettes 0.57, on a par with the level of 0.57 at the same time of 2006; Grade Three cigarettes 0.53, down from the level of 0.59 at the same time of 2006; Grade Four cigarettes 0.58, up from the level of 0.5 at the same time of 2006; and Grade Five cigarettes 0.53, up from the level of 0.47 at the same time of 2006. TAXES AND PROFITS In September alone, the tobacco industry of China generated 39.13 billion yuan (5.15 billion U.S. dollars) in manufacturing and commercial taxes and profits, an increase of 11.54 billion yuan (1.52 billion U.S. dollars), or 41.8 percent, over the same month of 2006, with the amount of manufacturing taxes and profits reaching 27.64 billion yuan (3.64 billion U.S. dollars), up 36.7 percent year-on-year, and with the amount of commercial taxes and profits reaching 11.49 billion yuan (1.51 billion U.S. dollars), up 55.9 percent year-on-year. In the month, the tobacco industry of China generated 16.37 billion yuan (2.15 billion U.S. dollars) in manufacturing and commercial profits, an increase of 6.1 billion yuan (802.6 million U.S. dollars), or 59.5 percent, over the same month of 2006, with the amount of manufacturing profits reaching 6.94 billion yuan (913.1 million U.S. dollars), up 53.4 percent year-on-year, and with the amount of commercial profits reaching 9.43 billion yuan (1.24 billion U.S. dollars), up 64.2 percent year-on-year. From January to September, the tobacco industry of China generated 307.36 billion yuan (40.44 billion U.S. dollars) in manufacturing and commercial taxes and profits, an increase of 67 billion yuan (8.82 billion U.S. dollars), or 27.9 percent, over the same period of 2006, with the amount of manufacturing taxes and profits reaching 209.07 billion yuan (27.5 billion U.S. dollars), up 27.8 percent year-on-year, and with the amount of commercial taxes and profits reaching 98.29 billion yuan (12.93 billion U.S. dollars), up 28.1 percent year-on-year. In the nine-month period, the tobacco industry of China generated 129.83 billion yuan (17.08 billion U.S. dollars) in manufacturing and commercial profits, an increase of 33.47 billion yuan (4.4 billion U.S. dollars), or 34.7 percent, over the level of 96.36 billion yuan (12.68 billion U.S. dollars) in the same month of 2006, with the amount of manufacturing profits reaching 51.86 billion yuan (6.82 billion U.S. dollars), up 39.3 percent year-on-year, and with the amount of commercial profits reaching 77.97 billion yuan (10.26 billion U.S. dollars), up 31.9 percent year-on-year. Enditem