Adnan Intro

ANALYTICAL STUDY OF MARKETING TOBACCO/CIGRETTE

OF

A Project Report Submitted for the partial fulfillment of the requirement of degree of Master in Business Administration.

By Adnan Shahzad

Certificate

The Supervisory committee certifies that the contents and the form of project report submitted by Adnan Shahzad have been found satisfactory for the award of degree of Master In Business Administration.

1- Chairman

2-External Examiner

Dr.Muhammad Qasim

----------------------------

ACKNOWLEDGMENTS

All praises and thanks are for the Almighty Allah, the Merciful, the only creator of the universe and source of all knowledge and wisdom, who blessed me with health, thoughts, and talented teachers, helping friends and afforded opportunity to complete this study. I offer my humblest thanks to the Holy Prophet Hazrat Muhammad (Peace be Upon Him), whose moral and spiritual teachings enlightened my heart, mind and flourished my thoughts towards achieving high ideals of life.

I am grateful to my teacher, Dr Qasim Sb, for his supervision in planning, execution and scholarly ideas that beautified the scientific nature of the assignment carried out. He always directed to enlighten the ways of life as well.

My sincere gratitude is to my loving friends and also to my class fellows who always helped me to complete my work.

ADMAN SHAHZAD

03216622630/0300797 9601

DEDICATION

I dedicate my project to my parents and my friends who helped in all aspect of life.

TABLE OF CONTENTS NO. I.

Title Chapter 01 Introduction i.Vision ii.Mission Tobacco Product Manufacturing Tobacco Types Tobacco Farming POTENTIAL FOR EXPORT iii.Marketing. iv.Marketing location v.World tobacco market vi.Tobacco prices vii.Major Exporters in pakistan viii.Economic Significanc ix. Our operations Hypothesis Null Hypothesis

II.

Chapter 02 Procedure Questionaire

INTRODUCTION We conduct study for marketing of tobacco for the promotion of the cultivation, manufacture and export of tobacco and tobacco Products and matters ancillary thereto.

Vision Our view on some of the complex issues facing the tobacco industry

Mission

Analytical study of tobacco/cigarette marketing in Pakistan .and provided awareness to the people. And collect information its export and imports in Pakistan and know it is beneficial for Pakistan or not

TobaccoProductManufacturing

Grant of agricultural production loans to tobacco growers. (Pakistan) By Faraz, Khan Publication: Economic Review Date: Tuesday, September 1 1998 Tobacco is an important cash crop of NWFP and the Punjab. With suitable crop husbandry, it is capable of yielding higher income to the growers as compared to any other cash crop. Linked with it is a viable and efficient tobacco industry. Tobacco, being a highly labour-oriented crop, provides ample job opportunities for (i) employment in the field at the time of production, priming and curing and (ii) in the tobacco factories where tobacco is processed for the manufacture of cigarettes. About eighty thousand persons are engaged in the crop production and marketing and another 35,000 FBR too thumps the tobacco industry Tuesday, June 16, 2009 By Shahina Maqbool Islamabad Even though tobacco products are stated to be cheaper and

hence more accessible in Pakistan today than they were 15 years ago, the new taxation measures on cigarettes, spelled out in the budget for the fiscal year 2009-2010 in response to a recommendation from the World Health Organisation and the Ministry of Health, reflect the government’s intention to control tobacco consumption in the country by using price and taxation policies as a tool. This is the fifth plausible measure taken by the government in quick succession over the past three weeks, to jolt the tobacco industry and to demonstrate a shift in its policy thinking; the erstwhile focus on gains in the form of revenue generated from tobacco sales can now be seen to have transitioned towards appreciation of the health costs of tobacco use. Previous measures taken in the direction of tobacco control include withdrawal of the controversial statutory regulatory order on designated smoking areas; imposition of restrictions on promotion of tobacco products; introduction of pictorial health warnings covering no less than 50% of the cigarette packs with effect from January 2010; and more recently, the president’s decision to halt the purchase of custom-made cigarette packets and outers for the presidency from Pakistan Tobacco Company. Price increases and taxation measures are known to impact patterns of tobacco consumption, particularly in low-income countries like Pakistan. According to the National Action Plan for Prevention and Control of Non-Communicable Diseases (NAP-NCD), an invaluable publication that appears to have been shelved by the government as it reinvents the wheel by coining a new ‘vision’ for control of NCDs, low-income countries are more likely to respond to increases in prices of tobacco. Yet, no practical measures in this direction were taken in the past, firstly, because of the government’s failure to challenge the might of the tobacco industry and the clout of retired senior bureaucrats managing the affairs of leading tobacco companies in the country; secondly, due to the existence of weak

implementation mechanisms, and thirdly, due to the past governments’ lack of commitment to reversal of the tobacco epidemic, which is one of the greatest public health challenges facing mankind. Assessed against this backdrop, the enhancement of excise duty and sales tax on cigarettes to generate Rs15 billion in revenue is being seen by health experts as a step in the right direction. The Federal Board of Revenue (FBR) has proposed levying of Rs4.75 per ten cigarettes as federal excise duty on the retail price of a packet selling for up to Rs10; Rs4.75 per 10 cigarettes plus 70 percent over every incremental rupee on retail price of a packet of Rs10-19; and 64 percent federal excise duty on retail price of over Rs19 per pack. The FBR, which has traditionally been seen as a big supporter of the tobacco industry, and as an organization usually at loggerheads with the Ministry of Health, has finally realized that the tobacco industry is not the biggest tax payer, but the biggest tax-collector, in Pakistan. The development will mark the end of an era, in which the tobacco industry extensively and aggressively used the gimmick of being the biggest taxpayer in the country, to influence the regulators. According to the NAP-NCD, dependence on revenue generated from tobacco has been a major impediment in the way of tobacco control. “Researchers have calculated that if there were a sustained and real 10 percent rise in the prices of cigarettes over the average estimated price in each region of the world, 40 million people worldwide would quit smoking and many more who would otherwise have taken up smoking, would be deterred from doing so,” it states. Tobacco takes over a 100,000 lives annually and a substantial cost is incurred in treating those afflicted by tobacco-related diseases.

Commenting on the new measures, an official working for an anti-tobacco coalition said, “Since a majority of the tobacco consumers in Pakistan represents the low-income group, this measure is expected to influence smokers to kick the habit. This was a long-awaited intervention; for the first time, we are seeing the regulators and the FBR moving in tandem against the tobacco industry,” he remarked. The measure is also in conformity with the country’s international obligations under the Framework Convention on Tobacco Control, Article 7 of urges member countries to introduce taxation measures as a means to reducing demand. Over 70 percent of the cigarette brands in Pakistan are available at very low prices, and hence are easily accessible to the poor. The country’s cigarette market is the 18th largest in the world. There are 57 tobacco manufacturers currently operating and around 78% of the market share belongs to two corporate giants: Pakistan Tobacco Company, a subsidiary of British American Tobacco, and Phillip Morris International (PMI), which acquired Lakson Tobacco Pakistan, in February 2007. The marketing activities of these giants are aimed at recruitment of new, young converts in to replace hard-core addicts who die. No other legal substance is as deadly and powerfully addictive as tobacco. Adolescent experimentation with tobacco can easily lead to a lifetime of tobacco dependence. A cross-sectional survey on a random sample of 632 urban school going children in Islamabad reveals that 28% of the urban adolescents under the ages of 15-18 years currently smoke. Of these, 75% are regular smokers and 58% have been smoking for the last too years; 92% of those who smoke were aware of the hazards of smoking and 78% had never tried to give up. In poor families in developing countries, purchase of

tobacco can easily represent up to 10% of total household expenditure. Tobacco use is killing over 4 million people every year at the global level; of these, approximately 60,000 are from Pakistan, resulting in a substantial cost that far exceeds the revenues gained. Moreover, the tobacco industry is spending its multi-billion tobacco promotion budgets to capture markets in the most populous countries, which includes Pakistan. The measures being taken by the government are appreciable no doubt; however, at the same time, some thought needs to be given to significant enhancement of spending on tobacco control. According to the WHO Report on the Global Tobacco Epidemic 2008, tobacco tax revenues are more than 4,000 times greater than spending on tobacco control in middle-income countries, and more than 9,000 times greater in lower-income countries. High-income countries collect about 340 times more money in tobacco taxes than they spend on tobacco control. These data provide food for thought.

Grocery Wholesaling U.S. Industry Report (One of 708 available reports - |

Industry Code: 42241, Apr 23 2009, 34 pages

About IBISWorld Industry Reports Wholesale Nation vs Fast Food Nation Typically, low levels of volatility and globalization within the industry once attracted plenty of bidders creating a low concentrated market. The latest trend for these bulk buyers is to consolidate and control the market, and computerize what they can for efficiency and maximum profit. As the population walks the path of a fast food nation, becoming wholesale will not seem like a fruitful endeavour in this declining environment. In-depth industry market research presented in a logical and consistent format. Including 34 pages of insights covering industry conditions, key statistics, competitor analysis and market share, product and customer segmentation and a 5 year forecast.

Key Competitors in this Industry Major Player Market Share

C&S Wholesale Grocers, Inc. XX.XX

Supervalu Inc.

XX.XX

Wakefern Food Corporation XX.XX

Unified Grocers, Inc. XX.XX

Products & Services

Product/Services Share

Grocery Specialties XX%

Canned Food XX%

Fresh Meat and Meat Products XX%

Packaged Frozen Foods XX%

Dairy Products (excl dried and canned) XX%

Paper and Plastic products XX%

Poultry, Fish and Seafood Products XX%

Fresh Fruit and Vegetables XX%

Other products XX%

Household chemicals, Laundry and Dry cleaning supplies XX%

Confectionery XX%

Coffee, Tea and Spices XX%

Soft Drink, Bottled Water and other beverage materials XX%

Bread and Baked goods XX%

Tobacco products XX%

Pharmaceuticals, Cosmetics and Toiletries XX%

Key Industry Statistics Key Industry Figures 2008 2009

Industry Revenue *109,951

XXXX $Mil

Revenue Growth *-2.3 XXXX %

Industry Gross Product *13,668 XXXX $Mil

Number of Establishments *3,189 XXXX Units

Number of Enterprises *2,969 XXXX Units

Employment *114,789 XXXX Units

Exports -XXXX

Imports -XXXX

Total Wages *11,249 XXXX $Mil

Become an "expert" in the Grocery Wholesaling industry! IBISWorld is the FIRST research firm to offer key statistics and in-depth analysis on every sector of the US economy. Our industry research reports feature 25-50 revealing pages, including market size, market share, segmentation of products and services, business insights, market trends, a 5 year industry forecast, and much more! All offered in an easy-to-use, online format. Why do it yourself? A few minutes with an IBISWorld industry profile is worth weeks of in-house market research. Knowledge is power... become an industry "expert" today!

SCOPE OF REPORT IBISWorld market research reports present industry information from all angles, quoting only true market statistics for trend analysis. Major market segments are identified, as well as forces affecting demand and supply within the industry. Performance analysis includes emerging industry trends, as well as recent results and performance of each key company. Drawing on this depth of information, IBISWorld provides 5 year forecasts for each industry.

WHO USES IBISWORLD? Our collection of market reports are used by leading financial institutions for strategic assessment of the entire US economy. Our suite of industry intelligence is also ideal for investment banking, accounting, business valuations, corporate & academic libraries, mergers & acquisitions advisory (M&A), management consulting, benchmarking, business brokering, advertising agencies, litigation support, due diligence, corporate strategy, strategic intelligence, competitive intelligence, business plans, small business, and start-ups.

DEFINITION Grocery wholesalers link food producers and retailers with minimal transformation and is an intermediate step in the distribution of merchandise. Trade usually includes dry groceries, perishable food products and non-food products found in grocery stores.

Types of tobacco Tobacco Types > Flue Cured Virginia (F.C.V)

Popular name :

Virginia or Cigarette Tobacco.

Growing areas : a) Plain areas for filler tobacco

Charsadda, Mardan, Swabi and Nowshera districts and Malakand Agency of North West Frontier Province (NWFP).

Area under crop 20000 hectares (+)

Production

48.0 M.kg (+)

Chemical composition

Nicotine 1.3 to 2.5 per cent

Reducing sugar 9.0 to 16.0 per cent

Chloride 0.75 to 0.90 per cent

b) Sub-mountain areas for semi-flavoured tobacco

Buner and Mansehra districts of North West

Frontier Province.

Area under crop 6000 hectares (+)

Production 12.0 M.kg (+)

Chemical composition

Nicotine 1.3 to 2.8 per cent

Reducing sugar 12.0 to 18.0 per cent

Chloride 0.60 to 0.80 per cent

Texture Medium to open grained; firm leaf structure

Usage :

cigarettes

Soil types and Loamy soils. (March to September. ) crop season :

Production Regulation :

Production is regulated according to the demand of the Tobacco Companies.

Fixing crop size :

The crop size is fixed after thorough publicising the demand of the Tobacco Companies.

Nursery grower :

The tobacco grower is also a nursery grower.

Construction of barn :

Barns are constructed conventionally

Operation of barn :

Curer/Fireman operate the barn.

Crop prospects :

It is a good cash crop for tobacco growers and caters the domestic requirements. Over and above a portion of production is also exported.

Assistance to The tobacco growers are assisted through growers : Board’s Research Stations/Model Farms. The Assistant Development Officers are stationed in the tobacco growing areas for imparting of the latest technology to the growers. The inputs for tobacco production are streamlined and tobacco production loans are arranged through Commercial Banks.

Colour :

Lemon, light orange, orange, deep orange.

Tobacco Types > LIGHT AIR-CURED TOBACCO Popular name :

Burley

Growing areas :

Dir and Swat districts in NWFP

Usage :

Cigarettes

Area :

900 hectares(+)

Soil types and crop season :

Sandy to sandy loam soil. March to October.

Production regulation Production is regulated according to the : demand. Fixing crop size :

The crop size is fixed after thoroughly publicizing the demand of the Tobacco Companies.

Nursery grower :

The burley tobacco grower is also a nursery grower.

Construction of curing shed :

Conventional curing sheds are constructed by growers/skilled persons.

Operation of shed :

The curing sheds are operated by tobacco growers themselves.

Crop prospects :

It is used by tobacco companies in small quantities for blending purposes.

Assistance to growers The Board has established a Research : Station on Burley tobacco for education and practical demonstration of latest technology to the growers in the area. Chemical composition

Nicotine 2.5 per cent

Reducing sugar 4.5 per cent

Chloride 0.001 – 0.005 per cent

Tobacco Types > DARK SUN CURED RUSTICA TOBACCO (BLACK LEAF) Popular Naswar Tobacco. name : Snuff Tobacco. Growing Hazro (Attock), Jampur (Rajanpur), Dera Ghazi areas : Khan, Mailsi (Vehari) districts in the Punjab Province, Bubak/Rasoolabad areas, district Dadu in Sindh province and Pishin/Qila Saifullah districts in Balochistan Province Area :

7000 hectares(+)

Producti 21.0 M.Kg (+) on : Usage : Snuff

Soil Loamy soils. types Punjab: February to May and crop Sindh: December to April/May season : Balochistan: April to October Producti Production is variable. on

regulatio n: Fixing Depends upon the interest of growers, previous crop size year’s prices, etc. : Nursery The tobacco grower is also a nursery grower. grower : Crop It is a cash crop for tobacco growers. prospect s: Assistan The growers are advised for production of ce to better yield and quality by the Board’s R&D growers staff. : Chemical composition

Nitrogen 1.0 to 2.0 per cent

Nicotine 2.4 to 3.4 per cent

Reducing sugar Nil

Chloride 0.35 to 0.90 per cent.

Tobacco Types > LIGHT SUN-CURED VIRGINIA TOBACCO

Chemical composition

Nitrogen 1.0 to 2.00 per cent

Nicotine 1.94 to 3.34 per cent

Reducing sugar Nil

Chloride 0.6 to 0.8 per cent

Tobacco Farming U.S. Industry Report (One of 708 available reports - See full list) Search for more industries | View a sample report

Industry Code: 11191, May 27 2009, 38 pages

About IBISWorld Industry Reports Where There Is Smoke There Is Fire

This industry is in decline, as enterprise numbers drop and demand languishes due to severe health concerns as Federal Government removed the price support and marketing quota systems exacerbating the decline of the in pressure for declining smoking rates and increased competition from foreign farmers.

In-depth industry market research presented in a logical and consistent format. Including 38 pages of insights co statistics, competitor analysis and market share, product and customer segmentation and a 5 year forecast.

Products & Services

Product/Services Share

Flue-cured XX%

Burley XX%

Fire-cured XX%

Other tobacco XX%

Cigar tobacco XX%

Maryland XX%

Key Industry Statistics Key Industry Figures

Industry Revenue XXXX $Mil

Revenue Growth XXXX %

Industry Gross Product

XXXX $Mil

Number of Establishments

XXXX Units

Number of Enterprises

XXXX Units

Employment

XXXX Units

Exports

XXXX $Mil

Imports

XXXX $Mil

Total Wages

XXXX $Mil

Become an "expert" in the Tobacco Farming industry!

IBISWorld is the FIRST research firm to offer key statistics and in-depth analysis on every sector of the US econom

Our industry research reports feature 25-50 revealing pages, including market size, market share, segmentation insights, market trends, a 5 year industry forecast, and much more! All offered in an easy-to-use, online format.

Why do it yourself? A few minutes with an IBISWorld industry profile is worth weeks of in-house market research. industry "expert" today!

SCOPE OF REPORT

IBISWorld market research reports present industry information from all angles, quoting only true market statisti

Major market segments are identified, as well as forces affecting demand and supply within the industry. Perform industry trends, as well as recent results and performance of each key company. Drawing on this depth of inform forecasts for each industry.

WHO USES IBISWORLD?

Our collection of market reports are used by leading financial institutions for strategic assessment of the entire U

Our suite of industry intelligence is also ideal for investment banking, accounting, business valuations, corporate acquisitions advisory (M&A), management consulting, benchmarking, business brokering, advertising agencies, l corporate strategy, strategic intelligence, competitive intelligence, business plans, small business, and start-ups

DEFINITION

Farms in this industry grow tobacco leaf. Tobacco farmers in the United States purchase farm inputs such as fert pesticides, plant seeds, plant bulbs, curing fuel etc., from farm supply and other wholesaling industries in order t is exported or sold directly to tobacco product manufacturers.

RELATED REPORTS

Similar Industries

Cigarette & Tobacco Product Mfg.

Up & Down Stream Sectors

Cigarette & Tobacco Product Mfg.

Cotton, Sugar, Tobacco & Other Farm Product Wholesaling

Tire Wholesaling

Farm, Lawn & Garden Equipment Wholesaling

Risk Rating of This Industry

Tobacco Farming

POTENTIAL FOR EXPORT

Complexities of export of tobacco and its manufacture are well known. Tobacco trade has peculiar features: for example USA, being an important exporter of unmanufacture d tobacco, is

the leading importer of tobacco needed for blending purposes. Quality of tobacco and price are the principal determining factors in its trade at the international level, in which a number of countries are involved. Looking at the Pakistan’s debut in international tobacco trade, it may be profitable to narrate the various stages of its import/expor t as follows:

Stag Year e I 1948 to 1968 II 1969 to 1971

Subsisting Position Pakistan was a net importer of tobacco to meet the demand of cigarette industry. Self-sufficiency was attained with a capacity to supp0ly 14-16 million kgs of low grade tobacco to the Eastern Wing (Bangladesh) for industrial use.

III

1972 to 1976

After separation of the Eastern Wing (Bangladesh), both area and production registered sharp decline. Sufficient stocks of low grade tobaccos were held by Tobacco Companies and Tobacco Agents/Mandiwalas. Possibility of its exports to other countries arose on account of surplus availability, cheaper price and devaluation of Pakistan’s rupees by 130% in 1972. Pakistan thus emerged as the cheapest seller in world market. This position subsisted upto 1975-76.

IV

1977 to 1987

Declining trend in the export of un-manufactured tobacco emerged due to following factors: a) Price competitiveness disappeared on account of escalation in domestic cost of production. Export prices of Pakistan’s tobacco, however, recorded an appreciable rise during the year 1974-1980 as is evident from the following unit value (CIF) of UK leaf imports. (Pence/kg) Year India Pakistan 1974 88.2 63.9 1980 116.2 109.2 % increase 31.7 70.9%

The position of export of un-manufactured tobacco and cigarettes during the last six years onwards is illustrated in the following statement:

Year

Quantity exported Tobac Cigarett Ciga co es rs (M.Kg M.N (M.Nos) s) os

Value Total Value Tobac Cigarett Ciga (M.R (M.US co es rs s) $)

19992000

3.90

16.060

273.13 7.440

280.5 5.420 7

20002001

5.98

11.770

578.05 6.220

586.1 10.032 8

20012002

3.20

108.240

231.11 49.180

286.4 4.659 1

20022003

5.49

74.23

316.75 45.62

362.3 6.25 7

8.27

163.96

642.74 124.35

7.17

44.73

626.67 46.94

3.83

21.00

332.80 66.70

5.77

26.12

0.77 543.85 24.64

20032004 20042005 20052006 20062007

(M.Rs) (M.Rs)

M.Rs

767.0 13.23 9 673.6 11.23 1 339.4 5.66 7 570.1 9.50 1.69 8

It will be observed from the above table that the trend of exports since the last few years up to 2000-2001 was on the ascendant. During 1999-2000 exports were worth US$ 5.420 million which grew by 85.09% to US$ 10.032 million during 2000-2001. As a result of the adverse fall-out of 9/11 incident, the exports showed a marked decline of 53.55% during 2001-2002 and were only US$ 4.659 million. Export orders were cancelled/deferred, freight charges and insurance costs increased for this part of the world, travel advisories were issued to businessmen in USA and Europe against traveling to security-sensitive regions. During the next year, 2002-03 exports showed a growth rate of 34% over the previous year and were registered at US$ 6.248 million. It will be further observed from the above statement that Pakistan exported 8270 tons tobacco valuing US$ 11.08 million during the year July, 2003-June, 2004. Total earnings from export of tobacco and its manufactures amounted to US$ 13.23 million during the year 200304 as compared to US$ 6.248 million during 2002-03 and US$ 4.659 million during 2001-02. The exports during 2003-04 were thus 111.68% higher than those of the same period July-June, 2002-03. If a comparable pace of growth is maintained during the next two years through market diversification, quality improvement, greater market access and aggressive marketing, there is hope that Pakistan could achieve a total export in the range of US$ 25-30 million by 2005-2007 and volume could reach 16-20 million kgs or 16000-20000 metric tons.

Exports > Major Importing Countries of Pakistani Tobacco during JULY, 2006 to JUNE, 2007

S.No Country Tobacco Cigarettes Cigar Total value (000Rs)

Quantity (Kgs) Value

M A R K E T I N G

U n d e r

S e c t i o n 6 ( a ) o f t h e P a k i s t a n T o b a c c o B o a r

d ’ s O r d i n a n c e , 1 9 6 8 d i f f e r e n t t y p e s o f t o b

a c c o h a v e b e e n c l a s s i f i e d i n t o g r a d e s w

i t h f u l l d e s c r i p t i o n t h e r e o f n o t i f i e d i n

t h e G o v e r n m e n t G a z e t t e . T o b a c c o m a r k e t i n g

i n N W F P i s r e g u l a t e d t h r o u g h P r o v i n c i a

l L a w ( M L O 4 8 7 a n d T o b a c c o M a r k e t i n g C o n

t r o l R u l e s , 1 9 9 3 f r a m e d t h e r e u n d e r ) w h i l e

i n P u n j a b i t i s r e g u l a t e d t h r o u g h C o d e o

f E t h i c s a n d d e c i s i o n s t a k e n b y t h e B o a r

d f r o m t i m e t o t i m e .

M e t h o d o l o g

y o f M a r k e t i n g

F o r p r o p e r r e g u l a t i o n o

f t o b a c c o m a r k e t i n g , t h e P a k i s t a n T o b a c c o

B o a r d a s c e r t a i n s t h e r e q u i r e m e n t s o f v a

r i o u s t o b a c c o c o m p a n i e s f o r d i f f e r e n t t y p

e s o f t o b a c c o f o r t h e e n s u i n g c r o p a n d p u

b l i c i z e s t h e s a m e a t t h e t i m e w h e n n u r s e

r i e s a r e b e i n g l a i d o u t . T h e u n d e r l y i n g

i d e a i s t o c r e a t e a n a w a r e n e s s o f t h e m a

n u f a c t u r e r ' s r e q u i r e m e n t s a m o n g s t t h e g r

o w e r s s o a s t o a i m a t a c r o p s i z e b e a r i n

g a r e l a t i o n s h i p w i t h t h e d e m a n d . T h e t o

b a c c o c o m p a n i e s a r e b o u n d t o e x e c u t e a g

r e e m e n t s w i t h t h e t o b a c c o g r o w e r s i n a

p r e s c r i b e d f o r m a t f o r t h e i r t o t a l d e m a n d o f

b o t h t y p e s o f V i r g i n i a a s w e l l a s B u r l e y

t o b a c c o

World tobacco market The world tobacco market is stable with over five trillion cigarettes consumed each year. Industry Overview The past year has seen significant change among the largest tobacco companies, with Imperial Tobacco’s acquisition of Altadis, formerly the fifth largest company in the industry, and Altria retaining its operations in the USA and spinning off its international tobacco operations to form Philip Morris International. Excluding China, which accounts for a third of total global cigarette consumption, the five largest tobacco companies are Philip Morris International, British American Tobacco, Japan Tobacco, Imperial Tobacco and Altria. The respective cigarette market shares are 24 per cent, 19 per cent, 17 per cent, 9 per cent and 5 per cent. Together, they account for 74 per cent of the total cigarette market.

Stability in the world tobacco market is a function of offsetting trends in the developed and emerging markets. In the developed markets, such as those in Western Europe, smoking incidence is expected to continue to decline, with the percentages of smokers within total populations reducing. However, the number of adults in the world is expected to grow, especially in emerging market regions, such as Africa and Asia, and as a result we expect that overall annual global consumption will remain broadly unchanged in the medium term. Tobacco regulation and legislation have increased in recent years, including restrictions on smoking in public places, advertising and promotional restrictions and pictorial health warnings. Excise duties have also increased, especially in the developed markets, leading consumers to downtrade to value brands and products. The level of excise also tends to facilitate a positive pricing environment for the industry.

Global market shares %

Other tobacco products, particularly fine cut tobacco, have experienced growth as a result of this trend, and this is expected to continue. Conversely, in emerging markets, premium brands

have been growing as consumers are increasingly trading up. The global market for cigars has been stable in recent years with growth being experienced in smaller, mass market oriented products. The market is concentrated in the developed markets of Western Europe and the USA, although growth is being seen in the emerging markets of Asia, the Middle East and Eastern Europe. Industry Outlook While the tobacco markets of the EU, North America and Australasia are mature we believe there are still many opportunities to grow profits. We expect that our organic growth will continue to be derived from volume trends across the emerging markets and product categories, enhanced by market share gains from other manufacturers resulting from entry into new markets, new brand launches and the introduction of innovative brand variations. Cost management will also contribute to organic profit growth. Diversification into the full array of tobacco products by broadening their portfolios beyond cigarette, is a common thread of the strategic objectives being pursued by the major tobacco companies, as is the development of international cigarette brands. Further consolidation within the tobacco industry may be limited, but still remains a strategic opportunity, with more focus on market or product specific acquisitions and strategic alliances.

Methodology of Marketing of Virginia Type Tobaccos in Pakistan

Methodology of W.P. Tobacco Marketing

Targets of Tobacco Companies Intimation of purchase targets to the Board by the tobacco companies under Tobacco Marketing Control Rule No.3 of 1993, framed under MLO 487: “Every tobacco company intending to purchase tobacco during a crop year shall indicate to the Board its total requirements of the tobacco from the ensuing crop, by the 21st day of October in each year. The Board will publicize the indicated requirements for various types of tobaccos, in appropriate manner, before the commencement of planting season.”

Execution of Agreements Execution of agreements by the Tobacco Companies with growers by December 31, each year, under para 2(I)(1) of MLO 487: “Every tobacco company, for the purpose of purchase of its targeted requirements of flue-cured Virginia tobacco, will execute agreements with the growers of tobacco by the 31st December in respect of the ensuing crop of tobacco. A copy of each such agreement will be supplied to the growers concerned and a list of all such agreements will be furnished to the Pakistan Tobacco Board as soon as may be possible after the execution of the agreements.”

1. This MLO shall extend to the whole of Zone ‘B’ and shall come into force at once. 2. Notwithstanding anything to the contrary contained in any law for the time being in force, or any decree or order passed by any court, or any agreement or contract entered into or made before the coming into force of this Martial Law Order, the marketing of tobacco between tobacco growers and every person, including a Company, engaged in the purchase of tobacco in Zone ‘B’ shall be regulated in the manner hereinafter specified. 1.

Flue-cured Virginia Tobacco

(1)

Every Tobacco Company, for the purpose of purchase of its targeted requirements of fluecured Virginia tobacco, will execute agreements with the growers of tobacco by the 31st December in respect of the ensuring crop of tobacco. A copy of each such agreement will be supplied to the growers concerned and a list of all such agreements will be furnished to the Pakistan Tobacco Board as soon as may be possible after the execution of the agreements.

(2)

Every Tobacco Company and other purchaser of flue-cured Virginia tobacco shall strictly follow the grade classification of tobacco as laid down by the Pakistan Tobacco Board vide its Notification No.SRO 522(1)/81 dated the 3rd June, 1981.

(3)

Every Tobacco Company and other purchaser of flue-cured Virginia tobacco shall prominently display at the purchase Depots the leaf sample of each grade and its minimum price notified by the Federal Government.

(4)

The weighted average price of tobacco for the crop of any year to be paid by a Tobacco Company to the tobacco growers shall not be lower than the weighted average price paid to them for the crop of the immediately preceding year.

(5)

There shall be constituted a Vigilance Committee at the purchase depot consisting of: (a)

A representative of the Pakistan Tobacco Board or the Provincial Agriculture Department;

(b)

A representative of the tobacco growers, nominated by the Provincial Agriculture Department; and

- 2(c)

A representative of the Tobacco Companies nominated by the Tobacco Companies.

(6) The Vigilance Committees shall check the grades assigned to various types of tobacco used for the manufacture of cigarettes and shall also ensure that no purchaser unnecessarily rejects, or pays price for, tobacco at rates lower than the minimum notified rates. It shall also resolve the differences or disputes between the tobacco growers and

tobacco companies, if any, arising out of sale and purchase transactions of tobacco between the parties. (7) The decision of the Vigilance Committee shall be taken by majority and shall be binding on the parties. (8) The Pakistan Tobacco Board will fix dates for the purchase of middle and top portion leaves keeping in view the purchase periods of such leaves during the past three years. (9) The tobacco growers will confine the bale weight from 50 to 60 kgs and that six bales will be offered by a growers on his turn. II.

White Patta (Mulki Tobacco)

(1) (a) All Tobacco Companies shall purchase at least 35 percent of their purchase targets of white patta tobacco indicated for any year direct from the tobacco growers; provided that where a Tobacco Company, during the crop of the immediately preceding year, had obtained 50 percent or more of its targeted requirements of white patta tobacco direct from the tobacco growers, it shall in no case reduce its direct purchase from growers below 50 percent of its indicated purchase target for the crop of any subsequent year. (b) For the direct purchase of white patta tobacco every Tobacco Company will chalk out a proper purchase programme, exhibit the same at the Buying Courtyards a fortnight earlier and also inform the concerned growers about it. (c) Every Tobacco Company shall make available to the Pakistan Tobacco Board, not later than the 15th May of each year, a

list, in duplicate, of the tobacco growers from whom white patta tobacco is to be directly purchased by it. (d) A copy of the list mentioned in sub-clause (c) shall be supplied by the Pakistan Tobacco Board to the Special Committee of Growers constituted by the Board for the purpose of verification of the genuineness of tobacco growers from whom direct purchase is made by the Tobacco Company. (2) The Mandiwalas. Agents and Suppliers engaged in the business of tobacco shall purchase tobacco brought at their business premises by the tobacco growers in the manner specified in this Order and shall provide all facilities in the sale of their stock as were provided to them in the past. In particular the Mandiwalas, Agents and Suppliers shall ensure that:-

: - 3 -: a)

The rate of commission charged by them from the sellers and the buyers does not exceed 6-1/2 percent and 1-3/4 percent respectively, that is to say, the total commission to be charged from both the parties shall not exceed 8-1/4 percent, and that no other charge, whatsoever, is claimed over and above the said commission;

b)

The payment of dues is made by them to the growers

within a period of ninety days from the date of sale transaction;

(3)

c)

No arbitrary deduction of weight on any account is made by them at the time of purchase;

d)

Such printed vouchers as may be prescribed by the Pakistan Tobacco Board are issued by them to the sellers and that no weights/ measures other than the standard weights and measures are used in the transaction;

e)

An accurate and up-to-date account of all purchases and sales transacted, the payments made to the growers in liquidation of their dues and the sale price paid to the growers for the purchase of tobacco, duly supported by printed vouchers and receipts, are at all times maintained and are made available, during business hours to the officials of the Board and members of Martial Law Inspection Team for inspection; and

f)

Statements of purchases and sales, the weighted average price paid and the payments made to the growers, on fortnightly basis from June to September, and, on monthly basis thereafter, are furnished to the Pakistan Tobacco Board in such form or manner as it may, from time to time, prescribe for the purpose and that such statements reach the Board’s office before the 5th and 20th of each month in respect of transactions undertaken in the preceding fortnight or month as the case may be.

The Tobacco Companies which purchase tobacco through the Mandiwalas, Agents and Suppliers, over and above the quantity purchased directly from the tobacco growers shall execute agreements with them by the first June of each year, at the latest. The agreements shall clearly specify in unequivocal and unambiguous terms the quantity of white patta contracted, its grade or grades, the minimum price settled for each grade and fortnightly lifting programme

along with payment schedule which shall not exceed 60 days from the date the lifting of purchased stock commences.

(4)

The weighted average prices to be paid by the Tobacco Companies and tobacco dealers, Agents and Mandiwalas during 1985 crop shall not be less than paisa 750 per kg. The price for subsequent years will be as announced in a Gazette Notification by the Provincial Government.

(5)

The Tobacco Companies shall undertake transfer of purchased stock from Mandiwalas and Tobacco Dealers from the 1st of August and this process shall be completed by the 30th of November, each year. Transfer of stocks shall be so undertaken that the stocks are lifted in each fortnight proportionately.

: - 4 -: (6)

The tobacco suppliers and Tobacco Companies will mutually decide whether the inspection of white patta stocks meant for sale will be made at the supplier’s warehouses/mandies or at the Tobacco Company’s own purchase depots. In the former case the suppliers will not be entitled to any transport charges, while in the latter case he shall be entitled to transport charges from the premises of the supplier to the purchase depot of the Tobacco Company at mutually agreed rates.

(7)

The suppliers will make payment to the Commission Agent/Mandiwalas within 60 days.

III.

General

(1)

The purchase targets intimated to the Pakistan Tobacco Board by the Tobacco Companies shall not be altered in any form without prior approval of the Board. The Tobacco Companies will also discourage purchases from azad growers that are non-agreement holders.

(2)

All Tobacco Companies shall commence purchases of tobacco from the date as fixed by the Pakistan Tobacco Board.

(3)

It shall be binding upon the Tobacco Companies to purchase tobacco in accordance with their indicated purchase targets.

(4)

All Tobacco Companies, Mandiwalas and Tobacco Dealers shall prominently display sign boards outside their established purchase depots, mandies and other business premises which shall remain open for the purchase and sale transactions on all working days, except Fridays or other public holidays and during such hours as may be prescribed by the Pakistan Tobacco Board for this purpose. The closure of business, more than two days at a time, shall require intimation to the District Magistrate concerned and the Board, stating the reason in support thereof.

(5)

All Tobacco Companies shall use dial weighing scales at their purchase depots. Where the existing platform weighing scales cannot be replaced within a single year, the change over shall taken place according to a phased programme which may be determined and approved by the Pakistan Tobacco Board.

(6)

The tobacco spilled over from the bales opened for inspection at the purchase depots, mandies and auction floors shall remain the property of the concerned tobacco growers who may collect it for disposal in the manner he deems fit.

(7)

All officers of the Pakistan Tobacco Board and Agriculture Department not below Grade-17, Magistrates of the First Class and Police Officers not below the rank of Deputy Superintendent of Police shall be entitled to inspect the purchase depots, mandies, auction floors and accounts of purchase and sale transactions with a view to ensuring that the provisions of this MLO are being fully complied with.

(8)

The Tobacco Companies shall submit to the Pakistan Tobacco Board purchase summaries on daily basis during the marketing season.

: - 5 -: IV. (1) For proper implementation of this Martial Law Order, the Martial Law Administrator may constitute Martial Law Inspection Teams consisting of an officer of the Armed Forces, a Magistrate of the First Class and an officer of the Pakistan Tobacco Board (hereinafter referred to as the Inspection Team) for such area as may be specified by the Martial Law Administrator. (2) The Inspection Team shall have the power to inspect any premises or any record of any Tobacco Company or other purchaser of tobacco and any mandiwala, Agent or supplier engaged in the business of tobacco. (3) The Inspection Team shall submit reports of its inspection to the Martial Law Administrator and the Pakistan Tobacco Board. 3.

Removal of Difficulties. If any difficulty arises in giving

effect to any provision of this MLO, the Government may make such order, not inconsistent with the provisions of this MLO, as may be deemed necessary for giving effect to the provisions of this order. 4.

Power to Make Rules. The Government may make rules for carrying out the purposes of this MLO.

5. is

(1)

MLO No.383 issued by Martial Law Administrator Zone B hereby cancelled.

(2)

The cancellation of the aforesaid MLO shall not affect the previous operation thereof or anything done, or any right, obligation, liability, penalty or punishment accrued or incurred thereunder, or any proceeding or remedy in respect of any such right, obligation, liability, penalty or punishment, and any such proceeding or remedy may be instituted, continued or enforced, and any such penalty or punishment may be imposed as if this MLO has not come into force.

6.

Any person who contravenes any of the provisions of this MLO be punished under the provisions of MLR-14.

…….

TOBACCO MARKETING CONTROL RULES, 1993 GOVERNMENT OF NWFP FOOD, AGRICULTURE, LIVESTOCK & DEPARTMENT Dated Peshawar

COOP: the 8-6-1993

NOTIFICATION No.SOAII (AD) 4(64) 91-92. In exercise of the powers conferred by paragraph 4 of MLO No. 487 of the then Martial Law Administrator Zone ‘B’ read with para 3 of MLO No.107 of the then Chief Martial Law Administrator, and in supersession of this Department’s Notification No.SOAII (AD) 4(12)84/Vol: IV dated the May 2, 1985, the Government of NWFP is pleased to make the following rules, namely:THE TOBACCO MARKETING CONTROL RULES, 1993 1. (1) these rules may be called the Tobacco Marketing Control Rules, 1993. (2)

These shall come into force at once.

2. In these rules, unless there is any thing repugnant to the subject or context:

Definitions: a)

“Board” means the Pakistan Tobacco Board constituted under section 3 of the Pakistan Tobacco Board Ordinance, 1968(I of 1968);

b)

“Government” means the Government of the NorthWest Frontier Province;

c)

“grower” means a person engaged in the cultivation and production of tobacco;

d)

“Mandi” means the premises established by the tobacco dealers at different places for the purchase and storage of tobacco;

e)

“purchase depot” means the premises established by the tobacco companies at different places in tobacco growing areas for the purchase of tobacco used in manufacturing of cigarettes;

f)

“supplier” means a person who purchases tobacco either from tobacco growers or dealers/agents and supplies it to the tobacco companies in prized form;

g)

“tobacco” means the commodity made of leaves of the plants Nicotiana tabacum and Nicotiana rustica, commonly known as tobacco and used in the manufacture of cigarettes or for consumption by any other modes such as Chillum, hookah, gazari and bidis ;

h)

“tobacco company” including a firm or agency or Association or group of individuals engaged in the purchase, redrying and processing of tobacco used in the manufacture of cigarettes and its marketing;

: - 2 -: i)

“tobacco dealer” means a trader engaged in the purchase and sale of tobacco and includes a commission agent ; and

j)

“Weighted average price” means the average price weighted by the quantities of all graded tobacco purchased by a tobacco company or a tobacco dealer.

Intimation regarding purchase targets: 3.

Every tobacco company intending to purchase tobacco during a crop year shall indicate to the Board its total requirements of the tobacco from the ensuing crop, by the 31st day of October in each year. The Board will publicize the indicated requirements for various types of tobacco, in appropriate manner, before the commencement of planting season.

Execution of agreements: 4.

Every tobacco company for the purchase of their targeted requirements of Virginia tobacco shall execute agreements with the growers on the form prescribed by the Board by the 31st day of December in respect of the ensuing crop of tobacco. A copy of each such agreement will be supplied to the grower concerned and a list of all such agreement will be furnished to the Board as soon as may be possible after the execution of the agreements.

Scrutiny of agreements: 5.

The Board shall constitute Committees of growers for scrutiny of agreements executed by each tobacco company in order to verify its genuineness.

Payment of dues to the growers for tobacco: 6. (1) The payment of dues to the growers by the tobacco companies as a result of sale transaction of Virginia tobacco during a purchase season shall be made through designated Banks and in accordance with the following schedule : (a)

Payment in respect of tobacco purchased during the 1st fortnight …. Within 7 days.

(b)

Payment in respect of tobacco purchased during the 2nd fortnight …. Within 15 days.

(c)

Payment in respect of tobacco purchased during the 3rd fortnight …. Within 21 days.

(d)

Payment in respect of tobacco purchased after the 3rd fortnight …. Within 30 days.

(2) The tobacco companies shall follow the same schedule of payment as provided in sub-rule (1) in their transaction of white patta tobacco with the growers.

: - 3 -: Commencement of purchase season: 7- (1) The Board shall constitute Committee comprising of its own official and representatives of Provincial Agriculture Department, tobacco companies and tobacco growers to fix a date or dates for the commencement of tobacco purchases

after surveying the condition of standing crop in different areas. (2) All tobacco companies and tobacco dealers shall commence purchases of tobacco from the date or dates as may be fixed by the Board in the manner specified in subrule (1). Closure of purchase season 8-

No tobacco company or tobacco dealer shall close its purchase depots or business premises till such time it has purchased its full targeted demand of various types of tobacco, or in case of a surplus production, the additional quantity of particular type of tobacco which may be allocated by the Board to the individual tobacco companies/dealers proportionate to their purchase targets.

Maintenance of record of purchases/price and submission of return to the Board 9- (1) Every tobacco company and dealer shall maintain complete and up-to-date record of purchases made, prices paid at the depot, and quantities of tobacco transferred from the purchase depot to the warehouses or redrying plants.

(2) The tobacco companies and tobacco dealers shall submit to the Board and concerned Vigilance Committees purchase summaries on the form prescribed by the Board on daily basis during the marketing season. Labour charges not to be claimed 10- No tobacco company shall claim labour charges from the

tobacco growers which are brought in fulfillment of the contractual obligations and as per programme indicated by the tobacco companies. Interpretation of rules 11- All matters connected with the interpretation of these rules shall be referred to the Chairman, Pakistan Tobacco Board, whose decision shall be final.

SECRETARY TO GOVERNMENT OF NORTH WEST FRONTIER PROVINCE FOOD, AGRICULTURE, LIVESTOCK AND COOPERATION DEPARTMENT. …..

GOVERNMENT OF THE NORTH WEST FRONTIER PROVINCE, FOOD, AGRICULTURE, LIVESTOCK & COOPERATION DEPTT. NOTIFICATION Peshawar, dated the 22nd May, 1996. No.SOAII (AD) 4(22)90/IV.—In exercise of the powers conferred by paragraph 4 of the MLO No.487 of the then Martial Law Administrator Zone ‘B’, read with para 3 of MLO No.107 of the then Chief Martial Law Administrator, the Government of the North-West Frontier Province is pleased to direct that in the Tobacco Marketing Control Rules, 1993, the following amendments shall be made, namely:AMENDMENTS 1.

In rule 6, after sub-rule (2), the following new sub-rule (3) shall be added, namely :“(3) All the Tobacco Companies and other purchasers shall issue vouchers to the growers having printed Book No; Voucher No. and Name/Place of purchase Centre and a

copy of each voucher issued to the growers shall be supplied by the Tobacco Companies/Purchasers to the Pakistan Tobacco Board and the concerned Bank Branch.” 2.

In rule 7.— a)

in sub-rule (1), the words “and also to chalk out proper time schedule for purchase of tobacco at various depots” , shall be added at the end before the full-stop; and

b)

after sub-rule(2), the following new sub-rule (3) shall be added, namely :“(3) All the Tobacco Companies and other Purchasers shall observe timings for tobacco business at the depots as the Board may determine.

SECRETARY TO GOVERNMENT OF THE NORTH WEST FRONTIER PROVINCE, FOOD, AGRICULTURE, LIVESTOCK & COOPERATION DEPARTMENT.

Manufacturing locations We currently have 57 manufacturing sites around the world. They focus on production quality, business simplification and optimising our cost base. Cigarette operations Country Burkina

Location Bobo Dioulasso

Name Manufacture Burkinabe de

Country Faso

Location

CAR

Bangui

Name Cigarette SA Société Centrafricaine de Cigarettes SA

Chad

Moundou N'djamena

Manufacture de Cigarettes du Tchad SA

Congo

Pointe Noire/Brazzaville

Société Industrielle et Agricole du Tabac Tropical SA

Corsica

Bastia Furiani

MACOTAB

France

Nantes

Cigarette factory of Nantes

France

Riom

Cigarette factory of Riom

Gabon

Libreville

Société des Cigarettes Gabonaises SA

Germany

Berlin

Reemtsma Cigarettenfabriken GmbH

Germany

Langenhagen

Reemtsma Cigarettenfabriken GmbH

Ivory Coast Abidjan

Société Ivoirienne des Tabacs SA

Kyrgyzstan Bishkek

Reemtsma Kyrgyzstan AO

Laos

Lao Tobacco Limited

Vientiane

Macedonia Skopje

Tutunski Kombinat A.D.

Madagascar Madagascar

SACIMEM SA

Mali

Bamako

Societe Nationale des Tabacs et Allumettes du Mali

Morocco

Ain Harrouda

Altadis Maroc

Morocco

Tetouan

Altadis Maroc

Country

Location

New Zealand

Wellington

Name Imperial Tobacco New Zealand Limited

Poland

Radom

Altadis Polska – Cigarette factory of Radom

Poland

Tarnowo

Imperial Tobacco Polska S.A.

Réunion

Saint-Pierre de la Réunion

SITAR

Russia

Yaroslavl

Balkanskaya Zvezda ZAO

Russia

Volgograd

OOO Reemtsma-Volga Tabakfabrik

Senegal

Dakar

Manufacture de Tabacs de l'Ouest Africain

Spain

Alicante

Altadis

Spain

Logroño

Altadis

Taiwan

Jhunan

Imperial Tobacco Taiwan Co. Limited

Turkey

Manisa

Imperial Tobacco Sigara ve Tutunculuk Sanayi AS

Ukraine

Kiev

Imperial Tobacco Production Ukraine

United Kingdom

Nottingham

Imperial Tobacco Limited

USA

Reidsville

Commonwealth Brands Inc.

Vietnam

Da Nang

Imperial Tobacco Vina Danang Company Limited

Other tobacco products and processing operations

Country Belgium

Location Menen

Cuba

La Habana

Name Ets. L Lacroix Fils NV Internacional Cubana de Tabacos (50%)

Dominican Republic

La Romana

Tabacalera de Garcia

France

Sandouville

Le Havre Threshing and treatment center

France

Metz

Roll-your-own factory of Metz

France

Strasbourg

Seita

Honduras

Santa Rosa de Copen

La Flor de Copan

Ireland

Mullingar

Imperial Tobacco Ireland

Morocco

El Moudzine

Altadis Maroc

Netherlands

Joure

Van Nelle Tabak Nederland BV

Philippines

Cavite

Philippine Bobbin Corporation

Puerto Rico

Cayey

Congar

Puerto Rico

Comerio

Congar

Spain

Cádiz

Altadis

Spain

Cantabria

Altadis

Spain

Palazuelo

Altadis

Sweden

Skruf

Skruf Snus AB

United Kingdom Bristol

Imperial Tobacco Limited

USA

Tampa, Florida

Altadis USA

Richmond, Virginia McAdoo,

Altadis USA

USA USA

Altadis USA

Country

Location Pennsylvania

Name

Paper/Tubes Countr Locatio Name y n Belgiu Wilrijk Ets. L Lacroix Fils NV m Woodsto Van Nelle Canada Limited Canada ck Germa Trossing Imperial Tobacco (Efka) GmbH & Co KG ny en

Exports > Major Exporters/Manufacturers Pakistan Tobacco Company Lakson Tobacco Company

Souvenir Tobacco Company Saleem Cigarette Industry Universal Tobacco Company Imperial Cigarette Industry Khyber Tobacco Company International Cigarette Industry Walton Tobacco Company Sarhad Cigarette Industry

Grade Description Primings and Lugs of thin body with open leaf structure and moderate orange color. Medium to heavy blemishes/spots upto 40%, length not less than 14 inches.

Grade Name

Pakistan Tobacco Company, Evacuee Trust Complex, Agha Khan Road, F-5/1 P.O.Box No. 2549, Islamabad, Pakistan. Ph.# 00-92-51-2823235 Exchange 00-92-51-20832000-5. Fax# 00-92-51-2278376-7, E-Mail: [email protected] Lakson Tobacco Company, Lakson Square, Building No.2, Sarwar Shaheed Road, Karachi. Ph# 00-92-21-5686474/5685960-5698266, Fax No. 00-92-21-5676380-5683410. E-Mail: [email protected] Souvenir Tobacco Company, F-102/1, Khayaban-e-Roomi, Block-7, Clifton, Karachi-75600. Ph#00-92-21-5832445. Fax#00-92-21-5868423. Saleem Cigarette Industry, Par Hoti, Mardan, NWFP, Pakistan. Ph#00-92-931-560688. Fax#00-92-931-560739.

E-Mail: [email protected] Universal Tobacco Company, Par Hoti, Mardan, NWFP, Pakistan. Ph# 00-92-931-560820. E-Mail: [email protected] Imperial Cigarette Industry, Dagai Road, Taraki, District Swabi, NWFP, Pakistan. Ph# 00-92-938-310101-5, Fax# 00-92-938-310105. E-Mail: [email protected] Khyber Tobacco Company, P.O.Box No.12, Mardan, NWFP, Pakistan. Ph# 00-92-931-63081/ 63083. Fax# 00-92-931-62702. International Cigarette Industry, Shewa, District Swabi, NWFP, Pakistan. Ph#00-92-938-310074. Fax#00-92-938-310374. E-Mail: [email protected] Walton Tobacco Company, Wardaga, District Charsadda, NWFP, Pakistan. Ph# 00-92-921-560133. Sarhad Cigarette Industry, Nawankili, District Swabi, NWFP, Pakistan. Ph# 00-92-938-311853/311838/530310. Fax# 00-92-938-311384. E-Mail: [email protected]

Economic Significance

Tobacco is a crop with myriad aspects. Not only does it involve scientific treatment, but requires special attention by the producers during the growth, curing and marketing stages. This crop possesses considerable economic significance and its impact on the fiscal and monetary policies of major producing, exporting/importing countries is quite pronounced. In Pakistan, although tobacco cultivation occupies a relatively small area of 0.27% of the total irrigated land in the country, it is of great economic value as a source of revenue, employment and foreign exchange earnings to the country. During 2004-2005, above Rs.28 billion were contributed to the Federal Exchequer as Central Excise Duty and Sales Tax. Being a highly labourintensive crop, about eighty thousand persons are involved in its cultivation, fifty thousands are engaged in 26 factories of the Tobacco Industry and another one million find indirect employment. It is also an important source of foreign exchange earnings for the country (US$ 11.61 million during 2004-2005). Had the production of tobacco crop not been developed by the Pakistan Tobacco Board on scientific lines, the country would have been importing raw material worth Rs.7-8 billion per annum (2004-2005).

Our operations A world leader We have long prided ourselves on being a world leader in manufacturing technology. WD & HO Wills began the trend back in 1883 by introducing a cigarette-making machine that could produce around 200 cigarettes a minute. At the time it was hailed as revolutionary. Today, our fastest machines can produce around 14,000 cigarettes a minute. We have moved towards an increasingly automated internal supply chain to maintain the highest possible production rate. Our investment in product design and innovative processing techniques continues to make us one of the world's lowest cost producers of tobacco products.

Our operations Our manufacturing operations are structured into three regions covering the Group's global operations. Each region has responsibility for all products including cigarettes, roll your own and pipe tobaccos, cigars, filters, tubes and rolling paper products. Within each region, 'leading factories' have been identified to provide supporting activities to local satellite factories. Efficiency and competitiveness At key locations around the world, we have invested in state-ofthe-art equipment, further improving our efficiency and competitiveness. We have a consistent benchmarking system across our factories and are looking to develop this further, extending productivity and efficiency measures to our supply chain, logistics and distribution activities. Moving towards a consistently measured production capability across the Group gives us significant opportunity to review and balance our total supply chain activity, while retaining the flexibility to react quickly to changing market conditions. This is an area from which we expect to gain significant benefit over the coming years. Shared technology Our factories around the world benefit from shared technology and expertise, leading to reduced manufacturing costs. We focus on high quality, low-cost manufacturing and have an ongoing drive to improve productivity across the business. Quality, flexibility and innovation are key in all of our facilities. Advanced techniques Conditioning and blending tobacco is the first stage of our manufacturing process. We have invested heavily in advanced techniques in this area with a view to improving quality, cutting waste and speeding production.

Common quality standards and measures Simplification and rationalisation of product portfolios and packaging are areas of focus. We also concentrate on the important area of business quality, particularly in applying common quality standards and measures, and have obtained ISO accreditations across a number of factories.

Hypothesis

TOBACCO IS A SO DANGURESS FOR HEALLATH Null Hypothesis PEOPLE LIKE IT BECAUSE IT IS A PART OF ENJOYMENT.

Chapter 02 Procedure The topic of my study was analytical study of Hr in private sector of Pakistan. It was most appropriate to conduct a study with the help of questionnaire. Questionnaire About 50 criteria were selected about the problem. With the help of supervisor the criteria were short listed up to 20. The questionnaire comprises of closely and opens ended questions. A 4 level scale was selected for answering the questionnaire. Population The following population was selected for the collecting the data. Businessman

Professionals Employers Employees Students Politicians Teachers

Questionnaire About 60 criteria were selected about the problem. With the help of supervisor the criteria were short listed up to 20. The questionnaire comprises of closely and opens ended questions. A four level scale was selected for answering the questionnaire. Population The following population was selected for the collecting the data. Businessman Professionals Students Politicians Teachers General public

Questionnaire Please complete and return the following information. This information is required when we consider coverage for any people response about tobacco 1. NAME

.

----------------------------------

2. AGE. 3. PROFESSION

----------------------------------

---------------------------------4. MONTHELY INCOME --------------------------------5. QULIFICATION ---------------------------------6. DO YOU LIKE SMOKING 7. ARE YOU INTERSETED IN CIGRETTE

YES

NO YES

NO

8. WHATS TYPES OF BRAND OF CIGRETTE -------------------------------9. MONTHLY EXPENSE --------------------------------10.EFFECTED DEASES

YES

NO

11.ARE YOU SUFFER FROM ANY DEASE

YES

NO

12.FACE ANY DIFFICULTY BECAUSE USE OF CIGRETTE YES NO 13.QUANTITY PER DAY -------------------------------14.ARE YOU REGULER USER 15.ARE YOU WANT TO LEAVE IT

YES YES

NO NO

Thank you for providing this important information for us to properly evaluate your risk.

Phone #:

Date:

Treatment Of Data In order to bring data in comparable form, this data is categorized in the form of percentage. The percentages were calculated by following formula. %age = f/n X 100 where f is frequency and n is total number. Chi Square test was applied to examining association between independent and dependant variables. X2 =

To know the significance of association between the execute, the calculated values of chi square wee compared with the corresponding table at 0.05. Level of significance at zero degree of freedom. Degree of freedom was calculated by d.f = (r - 1) (c - 1)