The history of Jordan's cigarette industry is relatively young, with its beginnings in the early 1930s; National Tobacco Company (NTC) owned by British American Tobacco (BAT) was formed first, followed by Jordan Tobacco and Cigarette Company (JTC), a locally owned establishment. Both were small, using local and imported tobacco, with just the cigarette making and cigarette packing (secondary) production lines functional.
In 1971, NTC was forced to close because of competition. JTC remained alone dominating the Jordanian market, mainly due to a restriction on imported cigarettes enforced by the Ministry of Supply until 1989. JTC was also engaged in limited export activities and in 1994 it formed an agreement with RJ Reynolds.
By 1992, the Jordanian market became more conducive to active competition and a group of investors established International Tobacco and Cigarette Company (ITC), launching its first products two years later.
ITC gained a sizeable percentage of the market with its high quality and affordable brands. JTC, as well as the Ministry of Supply, which imported multi-national brands in controlled quantities, dominated a substantial portion of the local market.
Within two years, ITC had established a solid reputation as a world-class competitor. In 1993, ITC formed a five-year agreement with Rothmans International Company, to produce Rothmans brands. In 1998, ITC signed an under-license agreement with Philip Morris and produced L&M (both the full flavor and the lights). With all these products, ITC controlled substantial market share. ITCs agreement with Philip Morris is ongoing and now includes all its cigarette products.
In the meantime, the Union Tobacco Company (UTC), founded in association with BAT to produce the latter's products under license, gradually gained a sufficient share of the local market.
Today, ITC dominates 96% of Jordan's local brands, which represents 25% of the total market. Philip Morris, BAT, and Japan Tobacco Company (RJ Reynolds), share the medium-upper segment, representing 75% of the total market.
In a world of globalization, the possibilities of expansion, both horizontally and vertically, are unlimited. ITC is well positioned to take advantage of this economic environment and has set for itself some very ambitious goals.
As part of its ongoing plans to foster development and prosperity, ITC is currently working on developing new products and expanding its existing product line in Jordan. Due to the fact that the Jordanian market is the driving force behind the firm's development, ITC works to respond to the demand of the Jordanian society in particular.
ITC's sales and marketing teams observe the Jordanian market in order to ensure that the firm's products, their nature, their taste and their appearance adhere to market changes and changes in consumer demands.
The firm is currently working on developing its production lines in ways that will reduce costs and increase productivity. Its on going collaboration with Phillip Morris will prove to be beneficial for both sides involved. In their search for new opportunities in business development, new markets to penetrate and new countries in which they could manufacture their products at lower costs, more lucrative customs policies, and fewer trade barriers the promise for benefit is high. The firm in Jordan will take on the production of raw materials in ways that will in turn ensure more efficient productions for years to come.
Local Outlook
ITC envisions a growth in sales volume of its local and international brands of cigarettes for the upper-segment market. Today, ITC dominates the lower-segment market with its local brands. Within one year, it aims to secure100% of the local brands sales and 50% of the international brands sales, thus acquiring 60% of total market share.
Regional Outlook
ITCs advantage in the highly competitive regional market lies in its pursuit of consistent quality, service, and price. Once ITC has built a firm base in its numerous export markets, it aims to expand its operations and develop brands with further improved quality and innovative designs.
International Outlook
ITC aims to enhance the quality of its products, to increase its sales volumes. ITC will develop its brands to international tastes, and compete in a consistent manner.