Local Tobacco Industries in East China in Preparation for Interregional Merger

Source from:  Shanghai Tobacco Industry newspaper 09/10/2008

The tobacco industries of Shanghai City and Anhui Province in east China are in preparation for an interregional merger to form a large tobacco manufacturing enterprise group, in accordance with the structural reform policy of the State Tobacco Monopoly Administration (STMA) meant to significantly sharpen the competitive edge of China's tobacco industry as a whole. Recently, General Manager Zhu Jianhua of Anhui Provincial China Tobacco Industry Corporation - the operator of the tobacco industry of Anhui - led a delegation to visit Shanghai and held a second round of talks with Director Dong Haolin of Shanghai City Tobacco Monopoly Administration and General Manager Shi Chao of Shanghai Tobacco Group on interregional merger of the local tobacco industries. At the talks, Dong promised that Shanghai Tobacco Group will actively and steadily promote the process of interregional merger of the two local tobacco industries in accordance with the requirement of the STMA, and the basic principles of "faithful implementation", "sincere cooperation", "development of big competitive brands", "mutual benefit and realization of an all-win situation" and "close cooperation and mutual assistance". According to Dong, "faithful implementation" refers to earnest, actively and faithful implementation by both sides of the requirement of the STMA and fulfillment of the annual production quotas issued by the STMA. "Sincere cooperation" means cooperation with sincerity in the establishment of rational and feasible targets and gradual promotion to meet the targets established, to eventually realize the development of big competitive cigarette brands, tighten cooperation among manufacturing subsidiaries and promote close cooperation between the two sides. "Development of big competitive brands" means to promote development of the Red Double Happiness as a big competitive cigarette brand owned by both sides, take development of the Red Double Happiness as a target pursued by both sides, and strengthen cooperation between the two sides in the development of technologies and marketing for other brands. "Mutual benefit and realization of an all-win situation" means to ensure realization of interests for both sides and sustainable development of the relevant enterprises. Shanghai Tobacco Group will be actively concerned about the development of Anhui Provincial China Tobacco Industry Corporation, support its efforts to increase the generation of taxes and profits and realize long-term development. "Close cooperation and mutual assistance" refers to all-round cooperation and close coordination between the two sides to seek common development, Dong explained. Speaking at the same occasion, Zhu briefed the participants in the meeting on the ongoing structural reform of the provincial tobacco industry of Anhui in two phases, which is intended to realize integration and to significantly promote the development of such big competitive brands as Mount Huangshan and Derby. He said that both sides need to actively promote the process of interregional merger, and continue to regularly hold consultations with the STMA, local governments and Anhui Provincial Tobacco Monopoly Administration. Also speaking at the talks, Shi said that as conditions are now ripe for interregional merger of the tobacco industries of Shanghai and Anhui, and as there already exists the basis for it, it is essential to reach broader and more in-depth understanding, to jointly conduct research and studies, to jointly report to the competent authorities and to jointly hold consultations with them in this endeavor. Enditem