Japan Tobacco (JT) has announced it was considering selling its Russian operations after suspending investment and marketing activities in the country last month following Moscow's invasion of Ukraine, reports Reuters.
“As announced on March 10th, we suspended new investments and marketing activities in Russia. Given the challenging and unpredictable environment, the JT Group has continued to evaluate various options for its Russia business, including potentially transferring its ownership,” JT said in a statement. The announcement came after it said in March it would continue manufacturing in the country, where it has four factories and 4,000 employees. That announcement was met with criticism after many global brands pulled out over the invasion of Ukraine and governments, including Japan, imposed heavy sanctions on Moscow.
According to Reuters, one option JT is considering is to transfer its Russian business to a third party, while allowing operations and employment there to continue, Deputy Chief Executive Koji Shimayoshi told analysts.
A company spokesperson separately said he could not comment on potential buyers for the business. In the current fiscal year, the company estimates Russia would contribute about 8 per cent of JT's group revenue and 15 per cent of adjusted operating profit.
Japan's Ministry of Finance is the largest shareholder in JT, holding one third of its shares, which generate about USD 1 billion in dividend revenue to the government each year.
JT and PMI each hold about 20 per cent stakes in the holding company of Russian tobacco distributor TC Megapolis JSC, the report said. Megapolis was, until recently, run by a Russian billionaire sanctioned by the European Union for links to weapons production, a Reuters investigation found