BANGKOK, Feb 25 (TNA) – The Tobacco Authority of Thailand is turning to hemp, tobacco sales and cigarette production in Vietnam as a tax increase will cut its local profit.
Daonoi Suttiniphapunt, governor of the state enterprise, said the excise tax would rise from 20% to 40% on Sept 16 and consequently the minimal price of cigarettes would increase to 93 baht per pack.
Her organization will bear the cost of 78 baht per pack due partly to the excise tax and its contributions to funds and its profit margin will be only 15 baht. Its annual profit would fall from about 10 billion baht to only 900 million baht, Ms Daonoi said.
The overall sales would drop from 32 billion cigarettes to 19 billion cigarettes a year and the organization’s market share would decrease from 60% to 50%, she said.
To cope, the Tobacco Authority of Thailand will introduce new flavors of its tobacco products, enter into a joint venture to produce cigarettes in Vietnam for local and foreign markets and produce rolling paper, clothes and cosmetic raw material from hemp.
Besides, it will use its plant at the Rojana Industrial Park to provide services to outsiders including printing services in addition to producing cigarettes. The plans should raise its profit from 900 million baht to 3.2 billion baht a year, Ms Daonoi said. (TNA)
