[Intl-tobacco] Ukraine tobacco exports up

[Robert Weissman]

19 Jul 2000
Cigarette exports on the increase
By Vitaly Sych, Kyiv Post Staff Writer
www.kpnews.com

Ukraine's tobacco factories more than doubled exports in the first half of
this year compared to the same period last year, with shipments flowing
mostly to other former Soviet republics.

Exports of Ukrainian-made cigarettes rose to 3.7 billion in the first six
months of this year , from just 1.7 billion in the first half of last
year, according to Ukrtabak Association. Dmitry Redko, spokesman for the
United States' R.J. Reynolds, owner of the Kremenchug tobacco factory,
said Ukrainian tobacco producers fill niches in the former Soviet
republics, with about a half of Ukraine's total tobacco exports destined
for the Russian market.

R.J. Reynolds has more than tripled exports from the country to 1.18
billion cigarettes in the first half this year, with Monte Carlo and Magna
Classic being the company's biggest export brands. Redko said his company
has invested some $26 million in Ukraine. He said Ukrainian tobacco makers
have raised sales abroad, despite a 5 percent tax to the Pension Fund they
have to pay on exporting their products.

Redko said the dramatic increase in Ukrainian exports is in part caused by
the manufacturers' shift to producing filter cigarettes following an
influx of cheap contraband filterless cigarettes. He said smuggled
cigarettes account for about 15 percent to 30 percent of domestic
consumption.

Others, such as Germany's Reemtsma and U.S' Philip Morris, also saw their
exports soar.