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CHINA

Giant cig maker plans to file IPO

09 Jan 2019. China National Tobacco Corp. (CNTC), the biggest cigarette maker in the world, plans to list its international unit China Tobacco International Co. (HK) on the Hong Kong stock exchange even as pressure increases on the government to reduce smoking, Bloomberg reported.

According to the report, HK is primarily responsible for procuring overseas tobacco leaf from countries like Brazil and Canada for the state monopoly, which produces four of every 10 sticks made in the world. The international unit accounts for a little portion of China Tobacco’s overall business, which has a bigger market share than the next five global tobacco companies combined. The listing represents a rare opening up of the state monopoly which is facing growing domestic concerns over China’s high rates of cancer and smoking-related disease. In 2016, the industry contributed profit and tax of CNY 1.1 trillion (USD 1.60 billion), according to China Tobacco’s website. CNTC otherwise doesn’t publish financial data voluntarily, according to the report.

China is the largest tobacco-consuming and -manufacturing country in the world, and critics contend the government is not doing enough to prevent the expansion of smoking because of the tax revenue it derives from the industry, reports Bloomberg. In 2018, lawmakers in China’s National People’s Congress called for higher taxes on cigarettes to prevent smoking among the young.