Cigarettes - via pixabay/geralt
CAIRO - 21 March 2021: Egypt's Industrial Development Authority has issued a bidding booklet to obtain a new license to produce cigarettes outside the borders of the Eastern Company, according to the latter company.
The company added that one of the conditions of the brochure is to provide the option for the General Assembly of the Eastern Company - Eastern Company to participate in the capital of the new company at a rate of 24 percent without bearing part of the license cost.
The existing manufacturers have and obtained the new license, under the requirement that the new license include the manufacture of new electronic cigarettes.
The conditions of the brochure included the inability of the new company to produce cigarettes in the popular price category controlled by the Eastern Company, which represents 98 percent of its sales, which guarantees that there is no competitive threat from the new company.
The company stated that the board of directors had formed a group of committees, including the risk study committee, whose top priority was how to deal with the entry of a new competitor in the cigarette manufacturing sector, and new plans were prepared to deal with this development, and several important projects were being studied that would be announced in succession. .
Previously, the Eastern company stated that the issuance of operating licenses in Egypt is an inherent right of the Egyptian government through the Industrial Development Authority, and that it is not a party to this decision.
This came in the company’s commentary on published news regarding the Egyptian government's intention to issue a new license to produce cigarettes in the Egyptian market, noting that the company does not have official information regarding the decision.
It added that it is studying several new investment projects that will enhance its position in the field of smoking and tobacco alternatives.
Previously, the Eastern Company announced an increase in its profits during the first seven months of the fiscal year 2020/2021 by 17 percent, to reach LE 2.95 billion, compared to LE 2.52 billion during fiscal year of 2019/2020.
The company said that the revenues amounted to LE 37.7 billion during January-to-July period current fiscal year, compared to LE 33.7 billion in the same period of last fiscal year.
Eastern Co. operates within the food, beverage and tobacco sector focusing on tobacco. It was established in July 1920.