Japan Tobacco not planning M&A in e-cigarette business now - CEO

TOKYO Mon Aug 25, 2014 1:59pm BST

A man walks past a logo of Japan Tobacco Inc (JT) outside the company's headquarters building in Tokyo February 20, 2013.   REUTERS/Toru Hanai

A man walks past a logo of Japan Tobacco Inc (JT) outside the company's headquarters building in Tokyo February 20, 2013.

Credit: Reuters/Toru Hanai

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TOKYO (Reuters) - Japan Tobacco Inc is currently not interested in further acquisitions of vaporisers or electronic cigarette brands, its president said on Monday.

Japan Tobacco, the world's third-biggest tobacco company is poised to complete a takeover of Zandera, the UK maker of the E-Lites e-cigarette brand, in the next few weeks.

    It also has a stake in Ploom, a U.S.-based maker of electronic pipe tobacco products or "vaporisers" with which it has signed a deal to sell the devices outside the United States.

    Like other global cigarette makers, Japan Tobacco is turning to e-cigarettes and other smoking alternatives to offset shrinking demand for regular tobacco cigarettes.

    In Russia, its biggest and most lucrative overseas market, tobacco cigarette sales are set to shrink by about a tenth this year, while the smoking population at home has fallen for 19 straight years.

    "With Ploom and E-Lites, we have the know-how and technology to get things started," President and Chief Executive Mitsuomi Koizumi told Reuters in an interview.

    Litigation risks have kept Japan Tobacco out of the United States, and Koizumi said the company still has no plans to sell regular tobacco products or e-cigarettes there.

    The company also has no plans to introduce e-cigarettes to Japan, Koizumi said.

    Devices such as vapour tanks, which allow users to customise nicotine levels and puff thousands of flavours, have recently eaten into e-cigarette sales, raising the question of whether global tobacco makers would target such products next.

    Asked about these devices, Koizumi said Japan Tobacco would steer clear of anything that didn't make use of its expertise as a tobacco company, including exotic flavours.

    The United States is the world's biggest market for e-cigarettes. Last month, the world's fourth largest tobacco firm Imperial Tobacco Group Plc said it would buy a string of U.S. brands including Lorillard Inc's blu e-cigarette unit.

(This story has been refiled to amend headline)

(Editing by Miral Fahmy)

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