The Marlboro Man Comes to Sarajevo (fwd)

[Robert Weissman <rob@essential.org>]

                   INTERVIEW-Sarajevo plant seeks new Marlboro licence 
                   04:02 a.m. Jan 19, 1999 Eastern 

                   By Daria Sito-Sucic 

                   SARAJEVO, Jan 19 (Reuters) - Sarajevo's tobacco factory,
which like the town's brewery stayed open
                   throughout the 1992-1995 siege, hopes to reach 70 percent
of its pre-war output level in 1999, Managing
                   Director Sefik Lojo said. 

                   The company, one of few profitable Bosnian firms, is also
negotiating with U.S. tobacco giant Philip Morris
                   (MO.N) to win back its licence from before the war to
produce Marlboro cigarettes, he said without giving
                   further details. 

                   Last year, the factory reached 60 percent of its 1992
production. Output rose to nearly 3,000 tonnes, a rise of 20
                   percent from 1997 and compared with an annual 4,500-5,000
tonnes before the conflict, Lojo said. 

                   The Sarajevo Tobacco Factory was the only plant licenced
to produce Marlboro cigarettes in former
                   Yugoslavia, but cooperation with the U.S. firm was halted
by the 43-month war. 

                   Despite the siege of Sarajevo, however, the 120-year-old
plant never stopped producing other cigarettes,
                   keeping output at about 30 percent of the level before
the war. Cash-starved Sarajevans used cigarettes as a
                   means of exchange. 

                   Today, it makes eight different local cigarette brands,
and Lojo said the company had managed to rebuild and
                   modernise its facilities without foreign loans, unlike
many other Bosnian firms. It has 560 employees, down from
                   900 in 1991. 

                   He estimated the war damage at 12 million German marks
($7.1 million), and said the factory had invested about
                   15 million marks ($8.9 million) to renovate and to buy
new machines. 

                   Lojo said the company -- which is 67 percent owned by
staff with the rest belonging to the state -- had shown a
                   profit since the war ended, but declined to give figures. 

                   The company would be ready to be privatised by the end of
next month, and he expressed hope it would be
                   among the first 

                   to be sold off in Bosnia's planned privatisation process. 

                   So far, the plant sells its tobacco products only in the
Moslem-Croat federation, which together with the Serb
                   republic makes up post-war Bosnia, but Lojo said it would
seek to expand once the ``political conditions'' for
                   this had been created. 

                   However, the company faces tough competition from
cigarettes which are smuggled into Bosnia and sold at low
                   prices. 

                   ((Sarajevo newsroom, +387 71 663 864, fax: 387 71 445 727)) 


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