[Intl-tobacco] Japan Tobacco studies European expansion (fwd)

[Robert Weissman]

Japan Tobacco studies  European expansion
by Michiyo Nakamoto / in Tokyo  
Source: Financial Times, Friday, 10/6/00

Japan Tobacco, the world's third largest tobacco company, which owns the
Camel and Winston brands outside the US, is considering ways to strengthen
its distribution network in Europe either through partnerships with or
acquisitions of local companies.

Katsuhiko Honda, president, said it was time for JT to consider how the
company might co-operate with local companies in Europe to strengthen its
competitiveness in that market.

"I think we have to consider not only M&A but alliances as well, in
production and distribution," Mr Honda said. "If, in order to compete well
in the European market, we can partner with someone we want to consider
doing so."

JT, which acquired the non-US businesses of RJR Nabisco for $7.79bn last
September, is looking to expand outside its home market, which is
maturing, and into other business sectors, in order to maintain growth.

Mr Honda said the company does not have a specific candidate in mind but
that the market environment in Europe made it ripe for consolidation. Many
smaller companies were feeling the impact of increasing competition by the
large tobacco manufacturers and "that is an opportunity for consolidation.
We are always watching (trends) carefully," he said.

Globally, JT is focussing on 11 industrialised country markets and 5
developing country markets among the 70 markets where it is represented.

In addition to growth in the tobacco sector, JT is looking to expand its
more recently developed pharmaceuticals and food and beverage businesses
both organically and through partnerships. JT announced on Friday it would
pay Y7.46bn ($68m) to acquire a 5 per cent stake in Katokichi, a frozen
food maker.  The acquisition follows JT's purchase of the Japanese arm of
Pillsbury in 1998.