Imperial Tobacco Summed up the Results of Activity in 2015

24.02.2016

In 2015, the weighted average market share of Imperial Tobacco in Ukraine increased by 0.6 percentage points and reached 22%*. The company managed to hold its market positions in terms of the tax burden on the tobacco industry and anticompetitive price wars. This was possible due to increased sales of cigarettes of the mid-range segment – Parker & Simpson and Prima.

 In 2015, tobacco factory owned by Imperial Tobacco was manufacturing products for both the Ukrainian market and for export. Total production amounted to almost 16.5 billion pcs., including 1.25 billion pcs. – products for export. The main directions of export of cigarette products – Iraq, Mongolia, Moldova, United Arab Emirates, Cambodia, Egypt, Uzbekistan, Senegal, etc.

 Last year, the factory of Imperial Tobacco in Kyiv launched local production of cigarettes of popular format Queen Size (the compact format of cigarettes) and cigarette production in large packs Big Box (25 cigarettes in a pack instead of 20). Due to this step Imperial Tobacco managed to abandon completely the import of cigarettes from the Russian Federation and to ensure uninterrupted supply of its product to the partners.

 Despite the unstable economic situation the company continued to invest in the Ukrainian economy. Overall, in 2015 £ 8.9 million were invested. The majority of investment was aimed at the technological development of the tobacco factory in Kyiv, including the commissioning of a new fully automated high-rise warehouse. This warehouse is currently the largest automated high-rise warehouse in Ukraine in terms of storage capacity since it allows to store simultaneously more than 16,000 pallets of products.

 The enterprises of Imperial Tobacco in Ukraine (Imperial Tobacco Ukraine FIE and Imperial Tobacco Production Ukraine JSC) are among the largest taxpayers in Ukraine. Last year they paid 6.18 billion UAH of taxes and duties to the budgets of all levels that is 37% more than in 2014.

 ‘Despite a difficult situation in the country and unpredictable conditions for operations of the tobacco industry Imperial Tobacco managed to hold its market share due to the right strategy and its effective implementation. Last year's sorest issue for the industry was a regulatory policy pursued by the state and lack of constructive dialogue between major taxpayers and the state.

Further development of the industry and the company will depend only on the legal stability and predictability of the regulatory environment. Otherwise, expansion of the shadow sector threatens to the tobacco market, and reduced tax revenues do the same to the state budget’, Mr. Oleh Strekal believes, Corporate and Legal Affairs Director at Imperial Tobacco in Ukraine, Moldova and the Caucasus.

*According to AC Nielson analytical company, December 2015.