CZECH REPUBLIC
reaching maturity











Interview with Mr. Ian Ferguson,
Managing Director
Read our exclusive interview




Mr. Ian Ferguson,

Managing Director

Contacts:
Dukelskych hrdinu 34, 170 00 Praha 7,
Czech Republic
Tel: +420 2 66 702 530
Fax: +420 2 80 93 95
Website: www.philipmorris.com
A BIT OF HISTORY



KUTNA HORA - the production of pipe and snuff tobacco started in November 1812 in the halls of deserted and deterioratin Cistercian monastery. The first cigars were manufactured in 1844, while the hand made cigarettes were first made in 1882. Machine manufacturing was launched in 1896. Just for comparison: in first years there were 5 million cigarettes produced annually while after the installation of machinery, in 1902 for example, the production increased up to 220 million cigarettes and in 1912 even to 311 million cigarettes per year. In 1963, the production of filter cigarettes was introduced and the last non-filter cigarette was made in 1975.

In 1987, after several years of negotiations, the manufacturing of the very first licensed cigarette - Marlboro - had started. Undoubtedly, the year 1992 was an important turning point in the history of the tobacco industry in the former CSFR, when Philip Morris became the major shareholder.

HODONIN - the oldest factory, founded in 1783 in the place of a medieval castle in forks of the Morava river. In 1802 the factory burnt down, but in 1819 was renewed and two years later the production of pipe, snuff and chewing tobaccos - so called "Skrutlik" - could begin. The beginning of cigars manufacturing in Hodonin, as well as in Kutna Hora, goes back to 1844 and the manufacturing of first cigarettes to 1873. It is interesting that they were mild ladies' cigarettes with the tip called Damesky and Jeninge. Together with the factory modernisation the production was steadily rising, for example in 1959 the output of cigarettes exceeded 5,5 billion. Nowadays, brands as Start, Bond Street and L&M are the dominating part of the production.

NOVY JICIN - the history of this factory dates back to 1870 with the first tobacco products - cigars. Only a few years later, in 1874, 53 million pieces had already been produced. The production of cigars has continued for more than 75 following years and ended in 1947. Since 1882, when the cigarette program was introduced, there was a steady increase in their production which was no stopped even during the World War I. But the smokers could "taste" the war restrictions: hops was added to the cigarettes and beech leaves to the pipe tobacco. At the end of sixties there were eleven different kinds of cigarettes produced there. This number has not been exceeded since. Nowadays, brands of Petra, Sparta, Start and Bond Street dominate the Novy Jicin production.


STRAZNICE - the youngest tobacco factory of that group, was built in 1947. At the beginning they focused on the purchase of raw tobacco for further fermentation of cigar tobacco. For chemical analyses of tobacco a laboratory with appropriate equipment was establiched later. Since 1969 it has carried out soil analyses for tobacco growers. In order to eleminate the seasonal work, the production of cased Burley tobacco, the most important component of cigarette cutfiller, was launched there in 1965. Casing is a special aromatic spraying of tobacco leaves used before the tobacco is processed. In 1977, the production of non-filter cigarettes, named Start, began. The total amount represented 900 million cigarettes a year. Nowadays the cased tobacco is being prepared there as well as some other cutfillers for our products.

PRAGUE - the headquaters of Tabak a.s.for the Czech and Slovak Republics are based there since 1992. They include departments of Human Resources, Marketing, Financial, Sales and Distribution, Public Relations, Planning and IS.

TABAK A.S. TODAY



In 1992, Tabak was privatised. The completition among important tobacco concerns was won by the world producer No. 1 of products in consumer packing - Phillip Morris. The most important factor was that a successful production of Marlboro cigarettes had already run here since 1987.

The huge investment in the technology, repairs and reconstruction soon changed the appearance of all Tabak factories. An entirely new factory with highly sophisticated production technology was built in Kutna hora, while in Hodonin, Novy Jicin and Straznice the investment was mainly in production lines modernisation.

SINCE OLD MAYAN DAYS .

There are many stories about the tobacco discovery. It is certain that the tobacco came from South and Central America. Smoking was usual during the Mayan religious rituals around the year 500 as it is obvious from the murals of the Mayan temples in Mexico. The healing effects were ascribed to the tobacco by the Mayans, too. In 1492, when Columbus discovered America, the Indians, who beleived that he came in peace, offered him many valuable objects, among them yellow-brown, dried, aromatic leaves of an unknown plant, which the indians called "Tobago". They wrapped grass, reed of corn leaves around rolled "tobago" leaves and smoked them ceremonially. That is how tobacco was discovered by the Europeans. The tobacco was soon imported to Spain and Portugal, where in 1558 its plantation started and it was used for snuffing and pipe smoking.

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© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Czech Republic published in Forbes Global Magazine.

October 2nd 2000 Issue.

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