Japan Tobacco heats up global expansion

TOKYO – Japan Tobacco International (JTI) continues to heat up its global expansion as it aims to bring its innovative heated tobacco product, Ploom, in 40 markets.

Akira Yamaguchi, director for reduced-risk products (RRP) at JTI, told visiting journalists that the company intends to grow its global market to 40 by 2026 under its Business Plan 2024 – Ploom X Geo-Expansion.

“Now, as of today, Ploom X is available in 24 markets. And by end-2026, we are aiming for 40 markets. We are on track to achieve this milestone,” he said.

JTI has managed to expand its global market for Ploom from only 13 in 2023. RRPs are tobacco products that are intended to be less harmful to smokers than traditional cigarettes.

It recently made Ploom available in the Philippines.

Ploom is the fastest-growing heated tobacco product in Japan and is broadening its footprint in key European markets like the United Kingdom, Italy and Spain.

Ploom’s entry into the Philippine market underscores JTI’s commitment to provide adult smokers with high-quality choices to satisfy their needs.

Ploom’s newest device, Ploom X Advanced, employs Japanese engineering in its design and technology. Its HeatFlow™ technology enables true tobacco taste with no smoke, no ash and less tobacco smell.

The launch of Ploom signals JTI’s continued commitment to building a business for the long term in the Philippines, following major investments in recent years, including its state-of-the-art manufacturing plant in Batangas and the establishment of its Global Business Services center in Manila.

“With the introduction of Ploom, it is another remarkable milestone as we are proud to be the first in Asia, outside of Japan, to launch the brand – a sign of our commitment to continue building on our expanding market presence,” JTI Philippines general manager John Freda said.

He said 2024 has been a landmark year for JTI, as it remains the fastest growing tobacco company in the Philippines and has been awarded as a top employer for the third year in a row.

Last month, JTI also launched Ploom in South Korea, bringing the total number of markets to 24.

Under its business plan, Yamaguchi said JTI intends to pursue sustainable profit growth over the mid-to-long term.

According to Yamaguchi, its adjusted operating profit at constant foreign exchange would grow at mid to high single-digit rate.

This comes after a flat growth this year to account for incremental investments toward RRP.

“Our tobacco business will be the main engine of growth supported by pharmaceutical and processed food business,” Yamaguchi said.

He said complementary profit growth areas would be pharmaceutical and processed food.

He said JTI would continue to optimize top line in combustibles and prioritize investment in heated tobacco.

Based on its fiscal year 2023 revenue breakdown, tobacco business accounted for 91.2 percent of the total, while processed food segment contributed 5.4 percent and pharmaceutical with 3.3 percent.

Its tobacco business manufactures and sells renowned brands including Winston, Camel, MEVIUS and LD, while its RRDs include Ploom heated tobacco products, Logic vapes, Nordic spirit nicotine pouches and infused tobacco products.

Its processed food segment include frozen noodles, frozen okonomiyaki (Japanese savory pancakes) and packaged rice as well as seasonings. In the pharmaceutical business, the JT Group conducts research and sells compounds related to cardiovascular, renal and metabolism; immunology and neuroscience.

JTI has 62 factories and 53,000 employees worldwide.

The company, Yamaguchi said, has allocated 450 billion yen worth of investments for RRPs between 2024 and 2026.