Integrated Report

Use of capitals
in the value chain

The JT Group’s capitals are employed and accumulated at each stage of the value chain, and the accumulated capitals are further used for increasing the added value of the entire Group. We also continuously engage in activities to ensure that this cycle is sustainable. Within these, our human capital and financial capital underpin and drive all activities throughout the value chain, and their abundance is the foundation of the JT Group’s growth.

Three strengeths cultivated through the accumulation of capitals
  R&D / Procurement / Manufacturing / Maketing / Distribution / Sales

Accumulated capitals

  • Development of new technologies and products that meet consumer needs and preferences at the R&D sites of each business, along with continuous accumulation of intellectual capital
  • Optimization of supply through long-term relationship building with tobacco leaf growers, dealers, and various suppliers over many years (social and relationship capital)
  • Realization of stable, cost-competitive procurement of high-quality ingredients (natural capital)
  • Global production system (manufacturing capital) for stable manufacturing of high-quality products that meet consumer needs
  • Inspection program that ensures high quality standards
  • Strong brand equity (intellectual capital) of product groups to support provision of products that meet consumer and patient needs
  • Thorough compliance with marketing-related laws, regulations, and guidelines for products provided in the tobacco and pharmaceutical businesses
  • Developing sales strategies based on strong relationships with distributors, tobacconists, and medical institutions (social and relationship capital)
  • Building of distribution networks optimized for consumer needs and adapted to the business environment

Strengths and characteristics

Globally integrated R&D structure with outcome-based, consumer-centric approaches

Over 2,000 IP filings, diverse innovation partnership with third-party players

High-level small molecule drug discovery capabilities

Proprietary yeast-related, processing and freezing technologies

Diversified leaf supply across vertically integrated operations and third parties, ensuring reliability regardless of weather or market fluctuations

Advanced planning and inventory management for uninterrupted manufacturing

Inspection and audit programs for ingredient safety

Global footprint, state-of-the-art equipment and manufacturing processes, with industry-leading quality standards for all our products

Ensuring product quality and safety in line with laws and regulations, and international standards

Strong brand equity, notably Winston, Camel, MEVIUS and LD, supported by focused investment

Consumers at center of our offerings: we provide freedom of choice and superior quality

Multiple leading brands by market share in Japan

Global sales network with tailored RTC for each market, and motivated salesforce with strong ties with trade

Responsible sales information provision system based on guidelines

Product proposal capabilities to meet consumer needs with a rich product lineup

Initiatives for increasing added value

Accelerating the development of new RRP platforms

Protecting innovation with sound IP strategy

Improvement of R&D productivity

Establishment of proprietary drug discovery technology

Development of new products considering environmental impact and sustainability

Further enhancing and adapting the RRP sourcing strategy to be more resilient and avoid disruptions

Increasing emphasis on social and environmental sustainability of supply

Continuously balancing risk mitigation and sourcing flexibility

Constantly reviewing and optimizing manufacturing footprint, while improving manufacturing processes

Expansion of RRP production capacity through continuous investment

Accelerating our environmental impact reduction initiatives to meet Group targets

Strengthening product proposal capabilities and sales strategies through understanding of consumer and patient needs

Continuous investment in brand equity across the business, notably Ploom in the tobacco business

Continuous deployment of youth access prevention strategies

Expanding capabilities in areas of digital, advanced analytics and B2C

Regularly evaluating new market entries and channels for profitability, while optimizing RTC based on the evolving environment

Disclosure of product information on websites and product packaging

Building stronger relationships with key distributors and tobacconists, while enhancing e-commerce capabilities in markets where nicotine and tobacco products e-commerce is legally allowed

Tobacco business Pharmaceutical business Processed food business