Foreign firms in talks with cigarette maker Mighty Corp

London-based British American Tobacco  (BAT) is biding its time on exploring partnership options as its low-tier Pall Mall brand continues to puff up sales.

BAT Philippines general manager James Lafferty said while the company is in no hurry to enter into partnerships on joint venture, it is open to anything that will benefit them.

Lafferty admitted they had engaged in talks with rival firm Bulacan-based Mighty Corp. but no agreement had been reached. “We held some informal talks but there’s nothing to disclose because no agreement has been signed.  We’re open to working with other companies especially if its going to be beneficial to us.”

Forging into partnerships is just among the options BAT is considering to improve its market share, which currently stands at a mere one percent.

“We have a lot of options especially with the coming Asean economic integration. But that does not preclude us from entering into partnerships,” Lafferty pointed out.

He said business has been booming, mainly driven by the strong demand for its Pall Mall cigarettes to the extent that it is experiencing low inventory more people are shifting to this brand.

Pall Mall Boost and Pall Mall Switch are now two of the fastest-growing brands in convenience stores, allowing BAT to capture around 10 percent of the low-tier cigarette market.

BAT is currently the smallest player in the Philippine tobacco market, which is dominated by Philip Morris Fortune Tobacco Corp. (PMFTC), the joint venture between global giant Philip Morris and taipan Lucio Tan’s Fortune Tobacco.

PMFTC has approximately 71 percent share of the local market while its closest rival Mighty Corp. holds around 20 percent. Other major tobacco players include Japan Tobacco International (2.6 percent), La Suerte Cigar and Cigarette Factory Inc. and Anglo American.

Mighty Corp announced new premium brands

Expect competition in the local tobacco industry to heat up.

Mighty Corp., the oldest Filipino-owned tobacco company, has launched its premium brands King and Chelsea in a bid to firm up its position as the country’s second-biggest cigarette manufacturer.

“Our decision to enter the premium brand segment is part of the company’s thrust to reposition our brands and expand our reach into all segments of the market,” Oscar P. Barrientos, Mighty executive vice president, said.

“We hope to extend the reach of Mighty Corp. and strengthen our position as the top Filipino-owned tobacco company in the Philippines,” Barrientos added.

He said that both brands are premium in terms of smoke character. “But from the packaging and cigarette design, King is more traditional while Chelsea radiates unconventionality,” he explained.

The two premium brands are blended with the finest tobacco grades to give off a balanced taste and aroma. Both come in full flavor king size, lights king size and menthol 100s or a total of six different variants.

“One of our advantages is the smell, flavor and aromatic taste of our cigarettes that are also exceptionally smooth, mellow and attractively packaged,” Barrientos, a retired RTC judge, said.

Mighty’s premium brands will be categorized in the highest tax bracket for cigarettes.

“Our decision to expand our product lines is just part of our vision to become a major player in the market and show what a Filipino company can do,” Barrientos said.

The company was established in 1945 by businessman Wong Chu King with a small factory in Manila producing native cigarettes known as “Matamis.”

The company was renamed Mighty Corp. in 1985 and bought the trademarks of Alhambra Industries in 1993. It now operates a nine-hectare fully integrated manufacturing and processing plant in Malolos, Bulacan.

Mighty Corp. was able to build up its market share through an aggressive marketing push and heavy investments in research, development and production.

Mighty Corp workers completed training

Thirty people, including 17 from local tobacco manufacturer Mighty Corp., have completed a proficiency-training seminar conducted by American experts on tobacco leaf utilization, leaf chemistry and leaf purchases.
The seminar, jointly conducted by MC and American Tobacco Associates (TA) Inc., also trained the participants on the US Leaf Standards Grading System for both Burley and flue-cured tobacco developed by the US tobacco industry in the early 1900s.
Bobby Wellons, tobacco training specialist from the US Department of Agriculture (USDA) conducted the US Leaf Standards Seminar on Burley and flue-cured together with TA’s vice president, Hank Mozingo.
According to retired Gen. Edilberto Adan, MC president, understanding leaf tobacco grading standards provides the foundation for learning and appreciating tobacco qualities and characteristics in the Philippines.
“More specifically,” he said, “the seminars helped those directly involved in tobacco manufacturing gain a better understanding of the unique characteristics of each US tobacco grade and which grades are more suitable for specific blend needs.”     
While MC provided all the necessary on-site assistance and essentials, the TA group supplied all tobacco samples and training materials. 
The short but comprehensive course was conducted at the new MC facility (Pavilion) located inside the factory grounds.  
Aside from the MC participants, the others came from the National Tobacco Administration, Universal Leaf Philippines, Trans-Manila Inc., Continental Leaf, Prudence and WCD. 
The first two days of the seminar focused on the Burley tobacco grades and characteristics. The remaining three days covered flue-cured. 
At the end of the training course, each participant received a certification from USDA for completing the program.
Overall, the tobacco grading seminar has successfully served its purpose, providing participants with a deeper and a more extensive knowledge on the different sectors of the tobacco industry.

Mighty Corp, charitable arm gave donation to Yolanda victims

The Wong Chu King Foundation (WCKF), a philanthropic non-government organization providing assistance to poor and underprivileged sectors, has donated more than P4-million benefitting directly and indirectly hundreds of victims of super-typhoon Yolanda in Leyte, Cebu, Iloilo and Capiz.

Camille Arsenal, WCKF coordinator, said the foundation’s board of directors led by its chairman, Nelia Wong Chu King, approved the release of the funds to the victims, including 78 employees of Filipino cigarette manufacturer Mighty Corp (MC) and their dependents whose homes were either totally or partially destroyed by the typhoon.

“WCKF did not think twice after learning of the extent of the disaster. The victims were given enough funds to enable them to pick up the pieces and recover from the disaster,” Arsenal said.

“We treat our employees like family,” explains Mrs. Wong Chu King, whose foundation is MC’s corporate social responsibility arm.

Yolanda, the most powerful tropical cyclone to hit the Philippines last year, slammed the country on November 8 and barrelled through most of the Visayas, leaving a trail of devastation in its wake.

The latest from the National Disaster Risk Reduction and Management Council lists at least 5,209 killed, 23,404 injured and 1,611 missing, but government updating of  figures on the disaster remains unfinished. Initial estimates placed the death count at 10,000.

Created in 1990, WCKF aims to perpetuate the memory of Wong Chu King, the family patriarch, a philanthropist who had provided assistance to the poor and underprivileged in his lifetime.

The foundation also aims to encourage and promote education through scholarship programs and raise funds for charitable, cultural and educational purposes.

On tobacco dust and Mighty Corp

Local cigarette manufacturer Mighty Corp. said it will donate tobacco dust, a fish pond conditioner that protects local ponds from predators, to help millions of Filipino fish pond owners and operators as well as tobacco farmers nationwide.

“We are going to help the National Tobacco Administration promote the use of tobacco dust by donating to our thousands of fish pond owners and operators all over the country,” Mighty Corp. executive vice president Oscar Barrientos said in a statement.

“In doing so, we are helping both tobacco farmers and fish pond owners and operators increase their yield,” he said, adding the company previously sold tobacco dust to fish pond owners and operators.

Barrientos said the NTA was promoting tobacco dust to control the population of snails and other fish pond predators, as this was “an effective and economic option to replace highly toxic and cyanide-based chemicals used in the preparation or sterilization of fishponds.”

He said the cigarette company aimed to increase the income of the tobacco-growing industry by buying 10 million tobacco leaves from local farmers all over the country.  It allotted P700,000 for the purchase of green leaves.

The NTA manufactures Tobacco Dust Plus at a plant in Sto. Tomas, La Union, where leaves are re-dried and pulverized.

The dust promotes the growth of lablab, an algae and natural fish food, and serves as pond floor conditioner. Pond owners and operators use it to prepare or sterilize fish ponds before stocking fingerlings there.

Fish stocking is the practice of raising fish in a hatchery and releasing them into a river, lake, or the ocean to supplement existing population, or to create a population where none exists.

Studies by a team from the Southeast Asian Fisheries Development Center in Tigbauan, Iloilo under Joebert Toledo had confirmed the tobacco dust efficacy.

Other studies headed by the government agency showed promising results from the use of tobacco dust as a substitute to chemical fish pond fertilizers.

Mighty aims to help local tobacco farmers earn more with a projected increase in the production of tobacco leaves and tobacco dust while helping pond owners and operators and the environment as well. 

Mighty Corp celebrates its 69th anniversary

Mighty Corp. (MC), the Philippines’ oldest cigarette maker, recently marked its 69th anniversary, drawing praises and congratulatory messages from some of the country’s leading firms and personalities as it vowed to buy more local tobacco for its expanding product line. 
Executive vice president Oscar Barrientos said the company is looking to export local blended and expanded tobacco. “We are working closely with local farmers and our local tobacco suppliers in planning and implementing our expansion programs,” he said.
Meanwhile, Mighty’s contigency is now fully activated to meet the smooth implementation of the new cigarette tax system it drew up as early as six months ago in anticipation of its final approval by the finance department upon the recommendation of the BIR,” Barrientos said.
The BIR has just released Revenue Regulation No. 7-2014 which imposes the affixture of Internal Revenue Stamps on imported and locally-manufactured cigarettes as well as the use of the IRSIS for the ordering, distribution and monitoring of tobacco manufacturers.
The re-launching of the company’s oldest and flagship brands, La Campana Ringing Bell and Alhambra cigarettes, known traditionally as “Matamis” and “Regaliz” blend lines, re-engineered and reblended to cater to today’s consumers, also highlighted MC’s remarkable years in business.
The company, which produces non-premium brands, had earlier launched two types in the premium category: King and Chelsea. These two brands are now categorized in the highest tax bracket for cigarettes.
“We hope to extend the reach of Mighty and strengthen our position as the top Filipino-owned tobacco company in the Philippines,” Barrientos said.
The company was established in 1945 as La Campana Fabrica de Tabacos, Inc. by Wong Chu King and started out with a small cigarette factory in Manila producing native cigarettes known as “matamis.” A second factory was built in Pasong Tamo, Makati in 1948.
A facility for tobacco threshing and redrying was constructed in 1963 in Malolos, Bulacan where the company’s present-day nine-hectare fully integrated manufacturing and processing plant is located.
Malolos Bishop Jose Oliveros celebrated a Holy Mass to commemorate Mighty’s anniversary as well as its primary and tobacco expansion facilities.
“As you gather as one family, I adhere to all of you to contemplate deeper on the face of Jesus Christ and reflect the mission of love,” Bishop Oliveros said.
Archbishop Emeritus of Manila Gaudencio Rosales enjoined Mighty and the Wongchuking family for the services they have extended to many small and large communities all over the country.
“Their social and philantrophic outreach have even gone farther than their products,” he added.
Archbishop of Caceres Rolando Tria Tirona cited Mighty for its growth as a successful company and for extending services through the various socio-economic and religious programs and activities to Filipinos.
“Mighty’s commendable efforts to reach out to people expressed social responsibility that is important to bring about change in our society,” he said.
Bulacan Gov. Wilhelmino Sy-Alvarado congratulated Mighty on its 69 years of remaining steadfast in its commitment to nation building and seeking solution to the current economic quandary.
“The company’s success didn’t just happen overnight. There had been hard work, diligence and competitive spirit of each member of this company,” the governor said.
His wife, Rep. Ma. Victoria Sy-Alvarado of the 1st district of Bulacan, said: “Mighty’s success is considered phenomenal and inspiring. It first became popular as a producer of native cigarettes but transformed into a major player in the low-priced cigarettes.”
“Not only that. Through the years, Mighty has lived up to its corporate social responsibility by being an active and dedicated partner of the government from the private sector in nation building and development,” she said.
Malolos Mayor Christian Natividad gave a poetic message saying: “It’s doing your job the best you can and being just to your fellow man. Looking forward and thinking high while making labor a brave romance. Success is serving, striving through strain and stress, it’s doing your noblest — that’s success.”
“Mighty has always been a good partner to our city and I am so proud of your success in doing business with us,h he added.
Vice Mayor Jonathan Sy-Alvarado of Lingkod Movement said gas one of your partners in providing public service to our people, I am also one with you in your mission in providing excellence and active participation in the socio-economic activities for the upliftment and development of our community.h
Bulacan Vice Governor Daniel Fernando praised Mighty for contributing to the upliftment and progress of their community and for continuously providing employment for fellow Bulakenyos and participating in socio-economic activities.
“Lead by your standards of excellence as responsible leaders of our society, may your spirit move you to even greater heights,h he said.
Congratulating Mighty, BdO Unibank said: gWe have been a witness to the many achievements the company has attained during its evolution from a niche player into a major contender in the highly competitive cigarette industry. The companyfs prospects are very promising and you can count on us to be your partner in growth.h
The company was renamed Mighty Corp. in 1985 and bought the trademarks of Alhambra Industries in 1993. By 2000, Mightyfs expansion continued all throughout the decade as it purchased and upgraded its production and packing facilities.

Foreign tobacco firm want to work with Mighty Corp, local firms

The British American Tobacco (BAT) has signified its willingness to partnering with another cigarette manufacturing company to cement a strong foothold in the country’s lucrative tobacco industry.

Robert Eugenio, BAT Philippines head of corporate and regulatory affairs, said yesterday that the Lucky Strike cigarette-maker is open to any “beneficial” opportunity in the Philippines.

Since BAT’s return to the Philippine market in 2012, the company’s market share grew at a snail’s pace despite a money-losing marketing strategy of selling imported cigarette packets below the economical price.

BAT, which unveiled a $200- million investment plan for the Philippines in 2012, currently has a weak distribution network in the country, and been incurring an additional cost for the importation of its Malaysia-made Lucky Strike and Pall Mall brands.

“In the process of running a business, we would look at whether partnering with another company would make sense than putting up our own manufacturing facility,” Eugenio said. “In the past, we partnered with La Suerte Cigar and Cigarette Factory, but it was terminated when we left in 2009.”

Meanwhile, industry sources said that BAT has already approached the Wongchuking family of Mighty Corp earlier this year to ask if the latter is open to any partnership.

“I’m not aware and involved in such a transaction,” Eugenio said when asked if BAT is in talks with the Bulacan-based cigarette company.

Sources said BAT wants a partnership with Mighty following its success in snatching up a substantial market share of local market leader PMFTC, a joint venture of LT Group’s Fortune Tobacco Company and Switzerland-based Philip Morris International (PMI).

Since the new excise tax regime took effect in 2013, PMFTC fought tooth and nail to protect its market position against Mighty, which has been very aggressive in offering cheaper alternatives to Lucio Tan and PMI’s premium cigarette brands.

The country’s second largest tobacco company, Mighty, known for the P1-a-stick cigarette, managed to raise its market share from a mere 3 percent in 2012 to nearly 35 percent last year.

However, Mighty’s success is hounded by accusations of tax dodging and smuggling.