Essentra Revenue Rises on Demand for Filters from Asia, Middle East

Source from:  Reuters  04/30/2014

Cigarette filter maker Essentra Plc reported a 17 percent rise in first-quarter revenue helped by growth in Asia and the Middle East, even as large tobacco companies close factories in Europe and developed markets.

Shares in the company, formally known as Filtrona, rose as much as 3 percent as it also announced its first foray into Australia, buying plastic products maker Kelvindale Products Pty Ltd.

Essentra　is seeing strong growth in China, India, Vietnam coupled with Middle East and Russia and the company is looking to benefit from growth in electronic cigarettes, Chief Executive Colin Day told Reuters.

"There is a decline in core tobacco, but there is a rise in e-cigarette consumption, about which we are currently talking to a variety of customers for our e-cigarette offerings," Day said.

Essentra, which makes products ranging from cigarette filters and fasteners to cartons and self-adhesive labels, has started making non-smoke filters as it looks to tap the fast-growing e-cigarette industry.

British American Tobacco (LSE: BATS.L - news) , Philip Morris International and Imperial Tobacco (LSE: IMT.L - news) are grappling with declining sales in European markets as regulation and taxes grow, and increasingly health conscious consumers smoke less.

Imperial Tobacco said this month that it would close factories in England and France.

Revenue at the company's filter products unit, its largest division by revenue, grew 11 percent on a like-for-like basis since the beginning of the year.

The FTSE-250 company said it bought Kelvindale, the smallest of the four acquisitions that it planned for 2014, to get into the Australian market.

Essentra did not disclose the purchase price for Kelvindale, which makes plastic caps and plugs used in industrial machinery, packaging and sporting goods.

Shares in the FTSE-250 company rose as far as 843 pence in early trade on Tuesday before easing back to 836.5 pence at 0800 GMT. Enditem