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JTI at a glance
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© Copyright JTI 2013
• JT was established in 1985
• In 1999 JT becomes global with the purchase of the international operations of R.J. Reynolds
• JT Group includes Japan’s domestic tobacco market, as well as beverages, seasonings, processed foods and pharmaceutical businesses
• A global Fortune 500 company*
• Over 51,000 employees worldwide, including JTI
• 33.3% owned by the Japanese government, making it the largest shareholder
JTI at a glance 2
Our parent companyThe JT Group
Beverages
Processed foods
Pharmaceuticals
Japanese domestic tobacco
*2013
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© Copyright JTI 2013 JTI at a glance 3
JTI today
27,0001
employees (approx.)
364
offices
25factories
8research & development centers
5 tobacco processing facilities
• JTI is the JT Group’s international tobacco business
• We employ people in 73 countries around the world
• We are a leading international tobacco product company created in 1999
• We sold 416.4 billion cigarettes2
• The Company’s core revenue is USD 12,273 million2
© Copyright JTI 2013
1 As of December 2013
2 Jan-Dec 2013
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JTI at a glance
A portfolio strongly represented across most price segments
4
Our Global Flagship Brand portfolio
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JTI at a glance 5
Our ‘Other Tobacco Products’ and ‘Emerging Products’
Roll-your-own, make-your-own
SnusCigars
Ploom
Electronically heated tobacco product that heats tobacco pods to create vapor
Shisha
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Investment case
JTI in Serbia
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JTI: the first and biggest Japanese investor in Serbia
2003 - JTI opens the
marketing and sales office in Belgrade
2006 - JTI acquires
Tobacco Industry Senta - todayJT International a.d. Senta
Initial investment of USD 45 million
USD 169 million JTI invested so far in Serbia.
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Key rationale
• Supplying promising markets of Serbia and West Balkans
Importance of CEFTA
• Free-trade agreement between Serbia, Montenegro, Bosnia & Herzegovina, Albania, (UN Mission in) Kosovo, Macedonia, and Moldova
• Provides 0% customs duty for our exports to Macedonia, Montenegro and Bosnia and Herzegovina
EU trade liberalization
• Preferable customs rates for import of various goods from Serbia envisaged in Stabilization and Association Agreement
JTI exports from Serbia
• Cigarettes to Bosnia and Herzegovina, Montenegro, Macedonia, Croatia and Albania
• Serbian-grown tobacco to the EU
• Total export of cigarettes and tobacco in 2013 worth USD 23,4 million
8
Why investing in Serbia?
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Senta factory
• Factory in Senta
• West Balkan’s headquarters in Belgrade
• Offices in Bosnia and Herzegovina, Croatia, Albania and Kosovo
JTI in Serbia production base for the Western Balkans7 markets – one EU member and 6 CEFTA parties
*
*The map is without prejudice to positions on status, and is in line with UNSC 1244 and the ICJ Opinion on the Kosovo declaration of independence.
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JTI: tax contributor in Serbia
JTI is the 6th largest taxpayer in the country
10
13.6 billion dinars contributed to the state budget in 2013.
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JTI growth story
2006
2007
2008
2009
2010
2011
2012
2013
Exp
ecte
d0
5
10
15
20
25
2.33.8
9.8
17.618.5
21.2 21.823.4
JTI Senta export growth
Leaf Cigarettes Total
• Sales volume in Serbia increased by 50% despite significant market contraction
• JTI’s share of market in Serbia increased by over 100% since 2006
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Tobacco growing operations in Serbia
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• JTI - a leader in tobacco production in Serbia with market share of 43% in ’12
• JTI cooperates in Serbia with 250 seasonal workers and 180 farmers
• Continuous growth of tobacco production and total yield per hectare
• Over 50% increased tobacco purchase
• 80% increase in contracted tobacco
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• Today JTI in Serbia employs over 300 people
• From 2006-2013 JTI generated 200 new jobs
• Engages over 250 seasonal workers
• Internships programs for graduated students (2010 – 2014) - 34 interns
• Skillful and well educated (mostly English-speaking) workforce
Employees – Wheel of our Growth
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• Senta factory is first in Serbia to implement Kaizen management process
• Fully accepted by the employees
• Productivity increased by 52%
• Reject ratio reduced by 66%.
• Factory certificated: ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007
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Kaizen
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• Continuous dialog with the Government
• Communication maintained on all key aspects of economic legislation development
• Investor-friendly tax regime
• Salary tax rate -10% and corporate profit tax rate – 15%, among the lowest in the Europe
• National treatment of foreign investors
• Serbia’s EU aspirations influencing regulatory environment that is heading towards alignment with EU
• Predictable development of operating environment (e.g. excise calendar in tobacco industry)
Conclusion
• The investment in Serbia proved to be good platform for business expansion of JTI in Serbia and Adriatica region
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Business Environment in Serbia
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