China's tobacco industry is likely to see cross-province reshuffles this year.

The State Tobacco Monopoly Administration will accelerate the restructuring of the industry through mergers and reorganizations in 2007, spokesman Zhang Xiulian said yesterday. "Substantial progress will be seen in cross-province mergers in 2007" based on the already-completed restructuring of factories within individual provinces, he said.
The number of cigarette factories was cut to 31 by the end of last year, from 47 in the middle of 2006. The number of brands, which stood at around 1,800 in 2001, decreased to 224.
The administration is trying to establish around 10 large-scale tobacco enterprises through mergers and reorganizations, producing some 10 major brands. Zhang said the restructuring of the sector will improve the competitiveness of China's tobacco industry.
Currently a merger between two cigarette manufacturers in Guangdong Province and Guangxi Zhuang Autonomous Region is on the cards, but the implementation has been postponed.
Statistics from the administration show China produced 2.02 trillion cigarettes, or 40 million cartons, 3.5 percent more than a year earlier.
A total of 2.03 trillion cigarettes were sold in 2006, up 3.9 percent from the previous year.(pi)