Japan Tobacco may consider US manufacturing of Ploom devices, executive says
LONDON, May 27 (Reuters) - Japan Tobacco International is open to producing its Ploom heated tobacco device in the United States, an executive told Reuters on Tuesday, as the Trump administration's tariff policies prompt some companies to rethink their supply chains.
JTI, a subsidiary of Japan Tobacco (2914.T), opens new tab which makes Benson & Hedges and Winston cigarettes, plans to launch its Ploom X heated tobacco device in the United States under a joint venture with Marlboro maker Altria (MO.N), opens new tab.
Heated tobacco devices heat up sticks of ground tobacco without burning them in an attempt to avoid the harmful chemicals produced via combustion. Currently, the companies only plan to manufacture the Ploom X tobacco sticks in the United States.
The devices themselves are mostly manufactured in Indonesia, with components coming from elsewhere, JTI's executive vice president for reduced-risk products, Takehiko Tsutsui, told Reuters in an online interview.
"There might be a possibility to think about assembling in the U.S," he said, after announcing the Japanese launch of a new iteration of Ploom, dubbed Ploom Aura.
However, such a shift could only be considered once Ploom had meaningful sales in the United States and until then, it may make more sense to look at other locations, he said.
U.S. President Donald Trump's threatened 32% tariff on Indonesian imports is currently on pause. Washington hopes its sweeping tariff regime will see manufacturing facilities and jobs return to the United States.
JTI and Altria need authorisation from the U.S. Food and Drug Administration in order to sell Ploom in the United States - a process that can take years.
Tsutsui said the companies are set to submit their FDA application for Ploom X around the middle of this year.
JTI also sells its Logic e-cigarette brand in the United States. The devices it sells are produced in China, Tsutsui said, currently subject to a 30% tariff.
U.S. sales of Logic are relatively small, so the impact of tariffs affecting the brand is "very marginal", he continued. He declined to discuss mitigation actions the company might take for competitive reasons.
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