TOKYO, June 12, 2009 --- Japan Tobacco Inc. (JT) (TSE: 2914) announced today that the JT Group has concluded an agreement with Tribac Leaf Limited and its affiliates (Tribac), a leaf tobacco supplier, to acquire Tribac’s business. Tribac operates in several parts of the world, including Malawi, Zambia, China and India. In addition the JT Group will enter into a long-term agreement with Tribac for the supply of leaf tobacco from Zimbabwe.
In a separate transaction, the JT Group has today signed an agreement with U.S.-based leaf tobacco suppliers Hail & Cotton and J.E.B to form a joint venture company JTI Leaf Services LLC (JTILS) for the procurement and processing of U.S. leaf tobacco. JTILS will supply directly contracted U.S. leaf tobacco, renown globally for its high quality and rich flavor characteristics, exclusively for the JT Group’s needs.
In the past few years, sharp price increases of various crops have caused leaf tobacco costs to stay high and induced volatility in the supply sources. Under these circumstances, the acquisition of Tribac and the establishment of JTILS will offer the JT Group enhanced stability and capability in procurement of high quality leaf tobacco and allow it to grow its tobacco business in a sustainable manner.