The Eastern Company plans to inject EGP 24m into the capital of the United Tobacco Company — the Egyptian arm of Philip Morris — in return for acquiring 24% of its EGP 100m capital.
Hani Aman — Managing Director of the Eastern Company — said that the Eastern Company will be represented by two members in the new company’s Board of Directors and will participate in the inauguration of the factory and production lines in accordance with the investment plans that will be agreed upon at a later date.
The deal required approving the printing contract with the United Tobacco Company and approving the main agreement to regulate relations between the United Tobacco Company and the Eastern Company.
United Tobacco will become the second company to manufacture cigarettes in Egypt, and this acquisition is part of an agreement previously signed by the two companies to manufacture cigarettes locally.
Aman added to Daily News Egypt that the company is trying to absorb the rise in production costs internally, resulting from the recent rise in the cost of raw materials.
He pointed out that the disruption of supply chains had a direct impact on the rise of some production inputs, in addition to the impact of the rise in the price of the USD on other products.
Aman stressed that the company is trying to reduce costs as much as possible, and bears the high costs internally, without reflecting it on the final consumer.
The revenues of the Eastern Company for Tobacco increased during the first nine months of FY2021/22, as it recorded EGP 12.78bn compared to the EGP 12.15bn recorded during the same period of the previous FY — an increase of 5%.
The company’s profits also rose during the period, recording a net profit of EGP 4.25bn, EGP 3.89bn — an increase of 9%.