Japan Tobacco, the world’s third-largest tobacco company, has decided to terminate its joint venture in India by the end of the year. The Japanese tobacco manufacturer has a 50% stake in the joint venture, JT International Indian Pvt Ltd. The venture has given up its licence to manufacture five billion cigarettes annually.
According to a report in the Business Standard, Japan Tobacco has shut its Hyderabad factory and sold most of the factory’s machinery. The report estimates that nearly 70 employees will lose their jobs, while several have already left the company.
The Business Standard quoted JT International spokesperson Proful Lall as saying that the decision to cease operations was based on “a significant accumulation of investment and an unsustainable business model in an operating environment where ready-made cigarette demand has not evolved, with several foreign investment, regulatory, duty and tax-related uncertainties”.
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