Philip Morris International, Inc., the leading international tobacco company, expressed interest in becoming the strategic investor of Vietnam National Tobacco Corporation (Vinataba), despite the tobacco manufacturer’s reports of decreasing profit.
|Philip Morris would be willing to help Vinataba with future ambitions |
In a recent working session with the leaders of the Committee for State Capital Management, Stacey Kennedy, president, South and Southeast Asia Region at Philip Morris International, Inc. expressed interest in the equitisation plan of Vinataba.
Especially, Philip Morris wanted to discuss what it could bring to the table as a strategic investor of Vinataba.
Stacey Kennedy said that in the 14 countries in South and Southeast Asia that Philip Morris surveyed, Vietnam is the most open market to iQOS, a heat-not-burn tobacco product which has already been introduced in developed countries like Japan, the US, and the United Kingdom.
According to the company’s financial statement, in 2017 Vinataba reported VND25.68 trillion ($1.12 billion) in revenue, signifying a decrease of 3.91 per cent on-year, which it put down to selling Hai Ha and Huu Nghi Confectionery.
The two share sales contributed a large part to Vinataba’s pre-tax profit of VND1.42 trillion ($61.87 million) in the first half of last year.
According to the forecast of the firm, in 2018 it may see a 27 per cent decrease in pre-tax profit due to losing the profit from the two confectionery firms.
Philip Morris entered Vietnam in 1994 via distributing Marlboro cigarettes.
Since January 2011, Marlboro cigarettes are manufactured under a sub-licensing agreement between PM Global Brands Inc. and Vinataba-Philip Morris Limited (VPM), a joint venture between the state-owned corporation Vinataba and PT Hanjaya Mandala Sampoerna Tbk, a PMI affiliate.
According to the statistics published by the World Health Organization, 40,000 people in Vietnam die each year from tobacco-related diseases, such as stroke and coronary artery diseases, among others. 30 per cent of all heart disease deaths are caused by cigarette smoking.
In Vietnam, almost one in two adult males (45.3 per cent) smoke tobacco. In addition, nearly 34.5 million non-smokers are exposed to second-hand smoking at home, restaurants, hotels, and at their place of work. This puts a great number of people at risk of cardiovascular disease. Not only smokers but also non-smokers who are exposed to second-hand smoke face an increased risk of heart disease and stroke.