Russia Assures RJR (fwd)

[Robert Weissman <rob@essential.org>]

Oct. 16, 1998 
                              Russia Assures RJR on Investment Climate 

                              MOSCOW, Oct. 16, 1998 -- (Reuters) Russian
First Deputy Prime
                              Minister Yury Maslyukov told the head of RJR
Nabisco Corp.'s R.J.
                              Reynolds International tobacco unit the
Russian government wants to
                              maintain a benign investment climate, the
company said on Thursday. 

                              "Mr. Maslyukov has assured Mr. Pierre de
Labouchere (president and
                              CEO of RJR International) the Russian
government intends to maintain a
                              policy which would attract foreign investment
to the Russian economy,"
                              Reynolds said in a statement. 

                              RJR, which makes Camel, Winston and Salem
cigarettes and has already
                              invested around $400 million in production
facilities in Russia -- the
                              world's fourth-largest tobacco market -- was
forced to suspend
                              manufacturing for 10 days in September
following a sales slump
                              provoked by the ruble's effective devaluation. 

                              The ruble collapse forced price increases of
300 percent or more on
                              most Western brands. Russia's deep crisis has
forced many foreign
                              companies to scale down their operations or
pull out altogether. 

                              "Production at our major factory in St
Petersburg was halted temporarily,
                              but resumed on Sept. 17 after adjustments were
made," RJR spokesman
                              for Russia and the Baltics Andrei Rogov told
Reuters. 

                              "Output and sales are gradually approaching
pre-crisis levels," he added.
                              Last year RJR produced 37 billion cigarettes
in Russia. 

                              Before the start of the current economic
crisis, Western cigarette makers
                              controlled about 40 percent of Russia's $6
billion a year tobacco
                              industry. RJR alone claimed 20 percent. ( (c)
1998 Reuters)