RJR To Invest More $ In Russia (fwd)

[Robert Weissman <rob@essential.org>]

August 18, 1998, Winston-Salem Journal
   
                                RJR to expand in Russia 

                                Company, with eye to future, to spend $120
million
                                on plant 

                                BLOOMBERG NEWS 

                                NEW YORK 

                                RJR Nabisco Holdings Corp., the No. 2 U.S.
cigarette-maker,
                                said yesterday that it would spend $120
million to expand a plant
                                in Russia, one of its main overseas markets
that has been plagued
                                by slower cigarette sales. 

                                The company's plant in St. Petersburg,
Russia, will become its
                                second-largest factory once the expansion is
complete. Its largest
                                plant is in Tobaccoville. 

                                RJR Nabisco's problems in Russia stem mostly
from the nation's
                                weak economy. With the Russian 90-day
interbank loan interest
                                rate at about 60 percent, wholesalers are
unable to stock up. The
                                company is also expected to lose about $18
million in profit
                                because of the Russian ruble's weakness
against the U.S. dollar,
                                analysts said. 

                                ''We strongly believe in the potential of
this country, and that gives
                                us the reason to invest considerable capital
in the Russian
                                industry,'' said Nick Ringer, a regional
vice president of R.J.
                                Reynolds International, RJR Nabisco's
international cigarette
                                subsidiary. 

                                Reynolds International has been making
cigarettes at the plant
                                since 1992, increasing annual production to
37 billion cigarettes in
                                1997. It holds more than 20 percent of the
Russian market,
                                primarily from sales of Peter I, a locally
produced brand. 

                                The company's growing presence in Russia is
not expected to
                                slow production at two plants in the
Winston-Salem area with the
                                capacity to make 150 billion cigarettes a
year and a history of
                                exporting 15 percent to 20 percent of their
products. 

                                Jan Smith, a spokeswoman for the company,
said that it has no
                                plans to move production to the Russian
factory from the plants at
                                Whitaker Park or Tobaccoville. 

                                RJR Nabisco's shares fell 1/8 yesterday to
23 13/16. 

                                • JOURNAL business reporter Jay Loomis
contributed to
                                this report. 

                                Published: August 18, 1998 

                                              © Piedmont Publishing Co. Inc.