Brief portrait of Reemstma

Reemtsma products - In the year 2000 total output amounted to 130 billion cigarettes - These are manufactured by about 11,000 employees in over ten different countries, and are sold in more than 100 countries all over the world. Reemtsma is part of the world´s fourth largest international tobacco company: In May 2002, the Imperial Tobacco Group PLC acquired 90.01% of the Reemtsma shares. In 2000, Reemtsma Group sales rose to more than DM 5 billion (after tobacco tax). Foreign business now accounts for about 75% of Group cigarette sales, focusing on Western, Central and Eastern Europe along with Asia.

In 2000, Reemtsma managed to increase its share of market for factory cigarettes in Germany to 23.4%. Here, the company has four factories: Berlin, Hanover-Langenhagen and Nordhausen as well as the subsidiary BTM Tobacco Specialities based in Lahr.

Since the opening-up of the Central and Eastern European markets, Reemtsma has stepped up its activities in this region. In 1991, the company bought Tobacna Ljubljana in Slovenia, in 1992 the Hungarian cigarette factory at Debrecen, and in the following year Reemtsma purchased Slovak International Tabak in the Slovak Republic. In 1994, Reemtsma purchased a majority share in the Ukrainian cigarette factories at Cherkassy and Kiev, and in 1996 Reemtsma acquired a qualified majority in the current Reemtsma Polska S.A. The company also expanded its business activities on the Central Asian market with the acquisition of Kyrgyzstan's only cigarette production plant in 1998.

With the aim of securing its significant market position in Central and Eastern Europe, Reemtsma opened two new factories in Kiev (Ukraine) and Tarnowo Podgórne (Poland) in 1998. In the same year Reemtsma bought the majority share in a Russian cigarette factory in Volgograd. In 1999, the Reemtsma subsidiary Tobacna Ljubljana acquired majority holding in the Macedonian tobacco manufacturer Tutunski Kombinat Skopje (TKS). In 1999 too, Reemtsma took the majority share in the Cambodian Paradise Tobacco Company Ltd. In 2000, the construction of the new Reemtsma production site in Bishkek (Kyrgyzstan) was completed.

Reemtsma's international strategic brands are WEST, DAVIDOFF and R1. Further important brands sold by the company in Germany include POLO, CABINET and PETER STUYVESANT. Since 2000, Reemtsma has been the German distributor for the BENSON & HEDGES brand. Among the local brands sold in Central and Eastern Europe are ARES and MOCNE in Poland and PRIMA in the Ukraine. In Asia, DAVIDOFF has been especially popular and successful for many years.

Reemtsma will continue to focus on the markets of Western, Central and Eastern Europe as well as Asia, and will use its strong international and national brands to utilise opportunities and to invest in the markets of the future.

Plesure from another World

Research & Development

The visual appearance of cigarettes has hardly changed at all in the last 30 years. But less obvious changes in 'cigarette design' have resulted in a more than 50% reduction of tar and nicotine in the same period of time.

One of the most important tasks for Reemtsma's Research department is to develop cigarettes that offer the smoker as much taste as possible, despite the continuing decrease of tar and nicotine levels.

The way to fulfil this task shall be illustrated with the example of the R1 brand. R1's particularly aromatic tobacco mixture is volume-activated, following a special process patented by Reemtsma which restores the volume of the tobacco leaf to the size it had prior to harvest and fermentation. By doing this, tar and nicotine content is reduced, while at the same time flavor substances are released that enhance taste and aroma. A special filter system is used to bundle the smoke, which further intensifies the taste.

Pursuing the concept to its logical conclusion, our R&D experts created R1 Minima, which is one of the lightest cigarettes on the German market with 0.1 mg nicotine and 1 mg tar. With its successful R1 brand family, Reemtsma is the German market leader in the segment of light filter cigarettes containing up to 4 mg of tar.

More than 100 scientists, engineers and other specialists work in our central Research & Development department in Hamburg. Their task is not only to develop new cigarettes, but also to guarantee the constant taste and quality of Reemtsma products by careful selection and inspection of all the materials used in the manufacturing process. The accredited Reemtsma laboratory makes sure that the tar and nicotine figures printed on the pack are maintained in accordance with international standards.

Reemtsma produces top-quality cigarettes according to the latest standards to ensure full smoking pleasure.

Reemtsma in the Kyrgyz Republic

Reemtsma Kyrgyzstan is one of the biggest investors in the Kyrgyz Republic.

In 1996, during an official visit to Germany, representatives of the State Joint-Stock Corporation "Kyrgyztamekisi" proposed the management of Reemtsma to start working with Kyrgyzstan. The negotiations between Reemtsma and Kyrgyztamekisi on this joint investment project on construction of a new tobacco factory and renewal of tobacco industry development in Kyrgyzstan were carried out during December 1996 and whole year in 1997.

The company has been successful in implementing its investment program. For example, reconstruction of the old factory with change of cigarette and tobacco workshop and ancillary equipment was done, which allowed to start production of Polyot (oval) new cigarettes from June 1998. The new system of purchasing and delivery of tobacco and auxiliary materials was organized and the modern marketing system has been led in. In October 1998, the production of new filter cigarettes, in May 1999 ASIA and KYRGYZSTAN filter cigarettes in hard pack and in May 2000 the new POLYOT LUX with charcoal filter cigarettes was started at the old factory. The construction of the new factory begun in 1998 was successfully completed in February 2000 and a whole production was moved from the old factory to the new. The portfolio of produced cigarettes amounted to 15 brands including brands such as WEST and PARAMONT.

Also the arrival of Reemtsma Kyrgyzstan brought a stable production growth. For example, in 1998, the company produced 0.8 bio. cigarette sticks, 2.1 bio. in 1999, 3.1 bio in 2000 and 4 bio in 2001. Taxes paid to the budget have appropriately increased: from 110 mio soms in 1999 to 300 mio soms in 2001.

Furthermore, company potential as an employer gives a meaningful support to struggle with unemployment problem in the Kyrgyz Republic. The company provides 500 Kyrgyzstanies with workplaces. All employees workunder the best working conditions. The company gives workplaces to thousands of people, who cooperate with it. Critically small number of tobacco growers rose incredibly. The company purchases fermented tobacco from fermentation factory, and also other raw materials and works with all suppliers of materials and services that are related to tobacco industry.