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Victor Crespo

Managing Director of Japan Tobacco International (JTI)

Created in 1999 when the JT Group acquired the non-US operations of R.J. Reynolds, JTI now employs 45,000 people and distributes world-known brands such as Winston and Camel in 130 countries. The group has been present in Greece for over 40 years, and is now the second top tobacco company in the country, contributing two percent of the Greek state’s entire tax revenue. JTI recently purchased a factory in the north of the country, reflecting its confidence in Greece’s economic recovery and the new government’s efforts to modernize the country

You joined JTC in 2001 and have worked for the company in various capacities and parts of the world. How does this background help you in your current position in Greece?

My experience in Portugal and Canary Islands has definitely helped me do the job that I’ve been tasked to do, because those markets have elements in common with the Greek market, despite having their own specific traits as well. My first priority when I arrived here in September was to understand the local market, get to know the business, the people, the factory, and to establish a roadmap agenda for growth by identifying the key strategies. We want to strengthen our position in the Greek market and implement our business plan.

We have a market share of 27% in conventional tobacco products and 24% of the total market

What is the company’s position within the industry in Greece?

JTI has had an uninterrupted presence of over 40 years in Greece, and our philosophy is to continuously improve what we do through transparency, and by putting consumers at the center of our activities. These are the core values of JTI internationally. In Greece, JTI is the second leading tobacco company, and we  provide around two percent of the state’s  entire tax collection in the country. Additionally, we employ close to 300 people in an industry that is very important to the Greek economy, because it provides a livelihood to around 50,000 families.

The Greek economy has been through rough times, but lately it’s been showing signs of recovery. In this context, what opportunities and challenges do you see for JTI?

The sense of recovery is one of the key opportunities that we see. There is also a new opportunity to reduce the significant illegal trade in tobacco, which accounts for 20% of the total market. More control over these activities would mean more tax revenues for the government and better conditions for the legitimate companies operating in Greece. This is a very regulated industry and we have learned the hard way that sometimes the wrong policies bring the opposite result as was expected. We saw this with the excessive taxation of tobacco in the last ten years, which boosted illicit trade from three percent in 2009 to 28%, which does not bring the government added revenue and hurts the legitimate companies. Now there are no more tax increases but illicit trade is still very high. We need more inspections, tighter controls. Some challenges that we see is the excessive regulation and bureaucracy, but we think that the government is working in the right direction on this. 

In 2018 JTI acquired the Syneteristiki Kapnoviomihania Ellados Sekap factory for around €10 million. What was the rationale for this, and how important is it for Greece?

The Sekap acquisition was part of a larger deal to purchase Russia’s Donskoy Tabac which was an important company there. The decision to invest in Greece by acquiring this factory shows the confidence that JTI has in the country. There are not many markets in the world where we have a factory. This investment is particularly significant for Greece because it is located in the north, which is less developed than the rest of the country, so providing high-quality jobs in the area is an important issue. JTI has been recognized for the last seven years as a top employer, and this is a very important point.

Despite 10 years of recession, a tax revenue crisis and a rise in illicit tobacco trade, JTI has been growing in Greece

How has this investment been working out so far, and how will it impact the company and the region?

The investment is a commitment to the country, and it reflects our decision to strengthen our position in Greece. We’ve been growing in the last years, and we want to keep up the trend.

What are the pillars of your strategy for growth?
Despite 10 years of recession, a tax revenue crisis and a rise in illicit tobacco trade, JTI has been growing in Greece. We have a market share of 27% in conventional tobacco products and 24% of the total market. We are confident about our prospects for future growth. Our intention is to grow steadily at 0.5% each year and consolidate our position in the market.

The Greek government is focusing on sectors with added value and on exports. How does your own activity contribute to helping the country’s economy?
In terms of agribusiness, Greece is known for its high-quality tobacco leaves and crops. They are well-known varieties, and we have been purchasing them for over 40 years. At our recent meeting with the minister of agriculture, we pledged to keep buying tobacco leaves in the country. As for improving exports, since October we have been producing Winston in the local market and we are also producing for export in up to nine European markets. This shows the importance of the Sekap factory investment. Greece needs to catch up in competitiveness and productivity and be more flexible as a country. We are contributing to that at Sekap. We have a well-rounded and holistic approach, touching all elements of the Greek economy: we purchase the leaves, we have acquired a factory here, we provide jobs, we pay taxes that represent two percent of the state’s tax collection, and we help with exports. There is little more that we can do to support the country. We do it because we see it as an important market.

JTI has been recognized for the last seven years as a top employer, and this is a very important point

What do you find so special about Greek tobacco?
It’s a high-quality, premium product. There is a long history of tobacco growing in Greece, and the geographical conditions, especially in the north, make that possible. We need to protect that legacy, which is part of the wider agricultural sector that Greece is known for, like its olive oil.

JTI is the second tobacco company in Greece. What are your competitive advantages?
We try to make and provide the best products possible, and we are obsessed with constantly improving quality. We also work with internationally known brands like Winston or Camel. And finally, there are our people: it is an honor to lead a group of individuals who are talented, committed and loyal, and that is key to our success here.

You are focusing on exports to eight or nine regional markets. Which ones?
We need to modernize the Sekap factory and bring it up to JTI’s global standards, and also to provide another European factory that can complement our other production facilities in Europe to bring our products to Spain, Italy and other markets. One of our biggest factories is currently in Germany.

How competitive is Greece as an investment destination? Is there a perception of risk?

I think that this perception still exists. There is still not enough investor confidence that you will get your return. But after living here and getting to know the market better, I see a lot of big opportunities. Having witnessed recoveries in many other markets, I can say that Greece is at the beginning of this process, and there is still room for growth in tourism, agriculture, real estate, ports, and other sectors of the economy.

The international community is not fully aware of many of Greece’s excellent products. How can the country elevate its standing in the international arena?

People must be made aware of the advantages of Greece. I think that the government is pursuing an agenda to modernize the economy and to increase stability and predictability in order to incentivize investment. And all this contributes to the country’s improved image.

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