Tobacco accounts for 80% of the group's profits.
Hongta group is one of the "large tobacco groups" created by the State Tobacco Monopoly Bureau to fight against foreign tobacco, and it has been involved in many fields such as automobiles, highways, electric power, finance, sports and cultural undertakings. However, a few days ago, Li revealed in an exclusive interview with this newspaper that after the system reform and industrial and commercial separation, hongta group will form a diversified development pattern with tobacco as the main industry, and will reduce investment in some unfamiliar areas.
Li believes that although hongta group has many advantages in capital, raw materials, technology and brand, the group has realized that the front line has been stretched too long, so it is currently adjusting its industrial structure. Li said that the tobacco industry is the most important sector of the group, accounting for 80% of the group's overall profits. Transportation, energy, water and electricity, chemical industry and other industries have stable income and rising profit rate year by year, which is also the focus of the Group's future diversification strategy development, while the investment in finance, securities, sports and cultural undertakings may be reduced.
Cross-regional mergers and acquisitions counter the smoke of foreign capital
Because tobacco has always been monopolized, the characteristics of monopoly between regions are very obvious. By merging tobacco enterprises all over the country, hongta group has successfully achieved the market penetration of major brands, thus increasing the weight of competition with foreign cigarettes.
Under the background of the State Tobacco Monopoly Bureau promoting cross-regional mergers and acquisitions of large groups, Hongta started the national market expansion plan as early as 2002. Li said that Hongta has formed a trinity pattern of northeast, southwest and Hainan, with Hongta brand as the core and expanding to Sichuan and Guizhou. In July, hongta group successfully opened the door of Sichuan-Chongqing market by letting Sichuan Shifang Tobacco Factory manufacture brands such as Ashima.
Li said that the country has always hoped that hongta group will expand its production capacity through cross-regional mergers and acquisitions, so as to strengthen and expand the tobacco industry and compete with foreign tobacco companies in Enemy at the Gates. Therefore, in the next two years, hongta group will further promote cross-regional mergers and acquisitions nationwide and strengthen the brand penetration of Hongta Tobacco.
Focus on the Shenzhen market this year.
Li revealed that Hongta will focus on building five major brands this year-Hongtashan, Yuxi, Ashima, Lunar New Year and Hongmei. According to the marketing plan of Hongta, this year, Shenzhen will become an important market outside the province for these five brands to attack. According to the investigation of Hongta, Hongta series products are the foreign tobacco brands with the highest rate of removal from shelves in Shenzhen, and have been distributed in more than 20,000 retail outlets in Shenzhen. The sales of Hongta cigarettes in Shenzhen account for about 30% of all foreign brands in Shenzhen.
In fact, Hongta hopes to realize China Tobacco's strategy of attacking overseas markets through this window. Hongta's ambition to enter overseas began as early as last year. Last year, Hongta announced its cooperation with Imperial Tobacco Company in advance. In this cooperation, Imperial Tobacco will invest 8.4 million US dollars every year to maintain the production and sales of Weiss cigarettes in China, and Hongta Tobacco will also enter the international market by Imperial Tobacco Express.
This time, Li said in an exclusive interview with this newspaper that Hongta Tobacco's next target market is overseas markets such as Southeast Asia, Europe and America. At present, the technical cooperation between Hongta and Imperial Tobacco has been fully launched. He believes that the production management technology of Imperial Tobacco, especially the production technology of blended cigarettes, is very helpful for Hongta Tobacco to understand the tastes of overseas consumers. Li said that the two sides will cooperate in the sales network next.