Russia’s oldest tobacco factory will close because of falling market – RBC

the Yaroslavl tobacco factory “Balkan star”

Photo by: Lori

Russia’s Oldest tobacco factory will be closed in January 2017. Imperial Tobacco, which owns the enterprise, refers to the increase in tobacco excise taxes, strict regulation and overall difficult situation in the economy.

an international company Imperial Tobacco announced the closure of 1 January 2017, the oldest Russian tobacco factories located in Yaroslavl. The capacity of the factory is involved only 40%, indicated in an official statement (there RBC). The reasons for this the company calls a steady decline in the volume of Russian cigarette market influenced by tough regulatory measures, the “tax burden” on tobacco products and the difficult situation in the Russian economy as a whole.

“we also strongly influenced by legislative ban on the production of packs number of cigarettes over 20 pieces. Shutting down production is an inevitable step towards the operationalisation of our business in the future” — are reported words of the General Director of “Imperial tobacco Yaroslavl” Oleg Dyatlov.

in Addition to the Yaroslavl factory of Imperial Tobacco has a production site in Volgograd. In 2014 there were installed machines for the production of packs of 25 cigarettes instead of the standard 20. To increase packs in ekonomsegmente manufacturers have gone because of the crisis, trying to keep consumers. Relevant products began to produce all five of the largest companies in the market — Japan tobacco International (JTI), Philip Morris, British American Tobacco (BAT), “Donskoy Tabak” and Imperial Tobacco. And this segment was the only one that showed growth in real terms, told RBC participants in the market. But in early 2016, the government banned the sale of more than 20 cigarettes in one pack.

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Now Imperial Tobacco disassemble production lines for the production of bundles increased in Volgograd, and in their place supply equipment from Yaroslavl, told RBC representative of the company Andrey Rogov. According to him, the historical building of the closed factories will be offered for sale.

According to a source RBC in Yaroslavl factory, in recent years it has resorted to planned production stops, which is characteristic for the tobacco industry, more often than usual. At the same time the production process in the building of the XIX century was associated with a number of technology problems.

Closure is not a surprise, according to the head of branch news Agency “Russian tobacco” Maxim Korolev. According to him, the policy of curtailing production at the Yaroslavl factory was adopted under the previous owner — the French company Altadis, which is owned by enterprise from 2004 to 2008.

According to the Queen, the closure will not affect the business of Imperial Tobacco, but “regrettably”, because the factory is a significant company for the domestic tobacco industry.

the Yaroslavl tobacco factory, founded in 1850, the state peasant Nikolay Dunayev by, is the oldest in Russia. In 1878, in honor of the victory in the Russo-Turkish war it was renamed “the Balkan star” and has long been known under this name.

the Decline in production due to the increase in the excise burden in the last year has already led to a number of major tobacco companies. In 2012, British American Tobacco shut down the factory “BAT-Yava”, distributing the production between its facilities in Saint-Petersburg (“BAT-SPb”) and Saratov (“BAT-STF”). In the summer of 2015 Corporation Japan tobacco International (JTI) announced the closure of the famous Moscow tobacco factory “Liggett-Dukat”. In 2007, the production capacity of the company and its development, the company has invested about $ 100 million.