Smokefree Leadership is SM's Target

Source from:  Tobacco Reporter 10/08/2010

Swedish Match is aiming to become the global leader in smokefree tobacco products following the previously-announced transfer of most of its cigar business to a joint venture with Skandinavisk Holding (SH). SM said in a press note that it would build on its leading position in Scandinavia and its number three position in the US, and continue its efforts to commercialize snus in new markets. And it would further capitalize on its chewing tobacco brands. The company plans also to continue developing its US mass market cigar business, which was not transferred to the joint venture, its matches and lighters business, and its Swedish tobacco products distribution business. At the same time, SM says that it will take, through its 49 per cent ownership, an active role in realizing the full potential of the joint venture, Scandinavian Tobacco Group (STG), which will be headquartered in Copenhagen, Denmark. SM has contributed to the joint venture its cigar businesses, with the exception of its US mass market cigars and its minority interest in Arnold André, as well as its pipe tobacco and accessories businesses. The former STG has contributed to the joint venture, in which SH holds a 51 per cent interest, all of its tobacco businesses, which comprise cigars, pipe tobacco and fine cut tobacco. "Swedish Match and STG have today created a focused tobacco company with an outstanding brand portfolio and increased scale, providing a strong platform for profitability and growth," said Lars Dahlgren, CEO of Swedish Match. "The new STG is an important milestone in realizing our strategy to develop the cigar business to best in class." STG becomes the second largest cigar company in the world with sales to more than 100 countries. The company says it enjoys leading positions with US premium cigars, and European cigars, and strong positions in a number of other markets. Leading cigar brands include Macanudo, CAO, Cohiba, Partagas and Punch in the US, and Café Crème, La Paz, Henri Wintermans, Colts and Mercator in Europe. STG says it holds the global number one position in pipe tobacco with sales to more than 60 countries. Leading pipe tobacco brands include Erinmore, Borkum Riff, Clan, Half and Half, and W.Ø. Larsen. In addition the company is the market leader in fine cut tobacco in selected markets, primarily in Scandinavia. The company will distribute SM's lights products in a number of markets, mainly in Europe. STG employs 9,700 people in 20 countries, has 17 production sites, sales companies in 15 countries and four distribution centers. Based on 2009 results, Swedish Match and STG's combined businesses had an annual turnover of €690 million and annual volumes of about 2.5 billion machine made cigars, 115 million handmade cigars, 1,800 tons of pipe tobacco and 2,100 tons of fine cut tobacco. The Board of STG comprises eight directors, with four representing each owner. Jørgen Tandrup, chairman of the former STG, is the chairman of the board, and Conny Karlsson, chairman of Swedish Match, is deputy chairman. Anders Colding-Friis, CEO of the former STG, continues as the CEO of the new STG. Enditem