Papastratos leads recovery

The Greek tobacco industry seems to be getting over the recession of recent years. Investment and new products launched in the domestic and foreign markets led to net sales of 800 million euros in 2001, with pretax profits reaching 70 million euros. Annual consumption in Greece continued to rise, if only slightly, after a significant turn toward light and foreign brands over the last decade. The main Greek players are Papastratos, Karelia, SEKAP and Keranis, and the foreign ones Philip Morris, British American Tobacco (BAT), JTI, Gallagher and Reemtsma. Philip Morris, with market leader Marlboro which is produced and distributed by Papastratos under a 12-year agreement, retained its top market share position with 25.5 percent, as against 25.7 percent in 2000, followed by BAT’s Peter Stuyvesant and Lucky Strike with 15.4 percent from 16.1 percent in 2000. Papastratos, the biggest Greek manufacturer, posted the biggest market share rise, increasing from 13.6 percent in 2000 to 14.3 percent, mainly on the strength of Assos International and President brands. Karelia and SEKAP captured market shares of 8.7 and 8.0 percent respectively. Papastratos, after a change to a management with a strongly technocratic slant 20 months ago, has focused on boosting its competitiveness at European level. This is based on a six-pronged policy, involving: Tapping positive market sentiment toward its products; utilizing its financial strength; increasing exports; tapping its considerable real estate assets (its eight-hectare property in Piraeus alone is valued at 90 million euros); developing the cigar market; and strengthening its position in Romania. Papastratos’s distribution network accounts for more than 40 percent of the market, as follows: 14.3 percent its own brands, 25.5 percent of Philip Morris brands (Marlboro, L&M, Chesterfield and Muratti), and imported brands 0.9 percent. Apart from Philip Morris, it also represents Altadis (Gauloises, Gitanes) and Ritmeester-Dannemann. The group remains one of the most profitable and largest investors in Greek industry. Net profits rose 21.9 percent to 36.6 million euros in 2001, with a 10.5 percent rise in consolidated turnover to 321.7 million euros. Gross operating profits rose 40.8 percent to 37.3 million euros. Its Romanian subsidiary broke even in a highly competitive market, but the group suspended operations in Ukraine. That suggestion was dismissed again yesterday by Finance Minister Nikos Christodoulakis.

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