[afro-nets] National Tobacco Engages in Expansion Project

[Claudio Schuftan <claudio@hcmc.netnam.vn>]

National Tobacco Engages in Expansion Project
---------------------------------------------

How the tobacco industry duped both academic journals and the
media

From: Ergeba Sheferaw

Along the same lines of tobacco industries and governments being
on big corporation side, read this article about the expansion
of the tobacco industry in Ethiopia with 78% of the funds coming
directly from the government. This is in the face of huge health
and development challenges including droughts and political un-
rest that the country is facing right now.

http://allafrica.com/stories/200602130161.html

The Reporter (Addis Ababa)
NEWS
February 10, 2006
Posted to the web February 13, 2006

By Filagot Sileshi

The National Tobacco Company is undertaking expansion projects
which will enable it to increase its productive capacity by 60%.
It has also bought two modernized and computerized machines at a
cost of 54 mln birr that will produce 10,000 pieces of ciga-
rettes a minute and 7.5 mln a day. Formerly it had produced over
3 mln cigarettes a day.

In addition to the above machines, it has bought cigarette
transfer machines at a cost of 6 mln birr and a filtering ma-
chine worth 7.8 mln birr.

At a press conference held on Thursday, W/ro Tiruwork
Woldehanna, marketing and sales manager, said that currently the
demand for tobacco is 4.4 bln pieces and from this National To-
bacco has a capability of covering 2.6 bln cigarettes or 53%.
4.6% is imported and 42% enters the country through contraband
means. This means contraband trade covered the greatest amount
next to those produced legally. As a result, the enterprise has
introduced a new brand, "delight" cigarette, that will help to
reduce contraband ones.

According to Tiruwork, the expansion project and the introduc-
tion of the new cigarettes have created job opportunities for
over 2,400 workers and this brings an additional income for
20,000 Tobacco leaf farmers.

Ayalew Abaye, material and supply manager, said that 58% of the
input resources were obtained locally while the other 42% are
imported. The enterprise has covered all the costs by itself.
These efforts make it one of the top ten organizations in the
country. "National Tobacco is on the verge of exporting ciga-
rettes to other countries, which will bring foreign exchange
earnings to the country," he added.

The general manager of research and quality control of the en-
terprise, Tekalegn Legesse, said that the need for producing
this new cigarette is to reduce the unemployment rate by creat-
ing job opportunities, and to reduce and control the contraband
trade. In addition, those imported illegally contain different
materials that will affect the health of the society. But the
cigarettes produced locally are of high quality and if smokers
use it, it will fulfill their demand and also benefits the coun-
try.

"There are some master plans like introducing other new ciga-
rettes to the society. The main objective of the enterprise is
to fulfill the smokers' demand rather than attracting other new
ones. So we are not advising the society to smoke but for smok-
ers to smoke cigarettes produced locally in order to benefit the
country," Tiruwork said.

National Tobacco was established in 1999 with a capital of 250
million birr. From this, 78% is covered by the government and
the rest by foreign investors. The enterprise earned a net
profit of 54,451,860 birr in 2004 and obtained general revenue
of 164,111,546 birr.