Chinese Tobacco Manufacturers Sign Deal on Cooperation in Joint Development of Big Brand

Source from:  TobaccoChina Online 01/04/2012

Guangdong Provincial China Tobacco Industry Corporation in south China's Guangdong Province and Shanghai Tobacco Group in east China's Shanghai City signed on December 23 a framework agreement on cooperation in joint development of a new big competitive cigarette brand known as the Double Happiness, on the basis of the merger between the Double Happiness cigarette brand owned by the former and the Red Double Happiness cigarette brand owned by the latter.

The two Chinese tobacco manufacturers wish to turn the new Double Happiness into the biggest cigarette brand in China, and also one of the biggest cigarette brands in the world. Under the framework agreement, Guangdong Provincial China Tobacco Industry Corporation and Shanghai Tobacco Group will start joint-venture production of Double Happiness brand cigarettes in January 2012, with the annual production capacity initially set at 250 billion cigarettes (5 million cases). However, the State Tobacco Monopoly Administration and Guangdong Provincial China Tobacco Industry Corporation have set an even more ambitious development target for the Double Happiness – By the year 2016, the annual sales volume of the Double Happiness will have topped 400 billion cigarettes (8 million cases), with the annual amount of manufacturing taxes and profits expected to reach 100 billion yuan (16 billion U.S. dollars), and with the annual commercial sales income expected to reach 200 billion yuan (32 billion U.S. dollars); by then, the Double Happiness will have become the No. 1 cigarette brand in China, and also an influential cigarette brand in the world. Then, why has Guangzhou Cigarette Factory of Guangdong Provincial China Tobacco Industry Corporation been chosen as a key player in turning the Double Happiness into the biggest cigarette brand in China and also one of the biggest cigarette brands in the world? In a recent interview with Chinese news media, sources with Guangdong Provincial China Tobacco Industry Corporation replied that Guangzhou Cigarette Factory boasts advanced cigarette making workshops that are the largest in Asia, that after completion of Phase One of the current project of technological transformation, its annual comprehensive production capacity can reach 75 billion cigarettes (1.5 million cases) or higher, and that it is capable of generating 15 billion yuan (2.35 billion U.S. dollars) or more in annual taxes and profits. Meanwhile, Guangzhou Cigarette Factory has reserved enough room for further business development, which provides a powerful support for enlarging the annual production capacity of the Double Happiness, according to the sources. After the 3 millionth case of Double Happiness brand cigarettes is turned out from the production line, Guangzhou Cigarette Factory will emerge as the new and largest base for producing Double Happiness brand cigarettes under the joint venture, which will contribute to greatly enlarging the annual production capacity of the Double Happiness. It is hoped that the joint venture will serve as a new start point for the Double Happiness to emerge as the biggest cigarette brand in China and also one of the biggest cigarette brands in the world. More significantly, the project of technological transformation of Guangzhou Cigarette Factory will not only directly contribute to promoting rapid growth of the annual production capacity and sales volume of the Double Happiness, but will also realize technological upgrading in the production of Double Happiness brand cigarettes. Sources with Guangdong Provincial China Tobacco Industry Corporation said that Guangzhou Cigarette Factory boasts a national-level technology center, which proves to be an origin of innovation of products. Besides, the production line at Guangzhou Cigarette Factory is particularly designed for the production of Double Happiness brand cigarettes. This production line comprises equipment procured in accordance with the unique technologies for making Double Happiness brand cigarettes. Innovation of equipment has led innovation of technology, and innovation of technology has in turn contributed to promoting innovation of products, according to the sources. Meanwhile, Guangzhou Cigarette Factory applies the basic designing concept of organic combination between large-scale production and flexible processing of products of multiple specifications, and being progressively and retrogressively compatible to Double Happiness cigarette products of all generations. As a result, Guangzhou Cigarette Factory has developed a system of technological standards generally applicable, providing a powerful support for the development of big competitive cigarette brands in the capacity of an enterprise group. Enditem