By Allen Liao The Great Wall Cigar Factory (GWCF) of China Tobacco Chuanyu Tobacco Industrial Corp. (CTIC) in southwest China – the maker of the famous Great Wall brand cigars – is in a two-year process of relocation and technological transformation intended to significantly strengthen its annual production capacity, upgrade its production technology and sharpen its competitive edge amid intense competition at the marketplace.
Relocation and transformation
The Great Wall is a sign of China and is a great achievement of the Chinese people through arduous work. Since its acquisition of the name, the Great Wall cigar brand has been on a sacred mission to lead Chinese-made cigar products to reach greater heights. In the devastating earthquake that hit southwest China on May 12, 2008, GWCF– based in Shifang City of Sichuan province – suffered serious losses. Its office buildings and workshops suffered extreme cracking, roofs collapsed, the water tower was rendered useless and all the walls were damaged.
As a result, the factory had to suspend operation. Yet, GWCF was never defeated because of the mishap. Instead, in the wake of the powerful earthquake, it has been taking advantage of the opportunity relocation and technological transformation offered to advance toward a higher level and to reach a higher target.
In assisting CTIC in post-quake reconstruction and restoration, the State Tobacco Monopoly Administration (STMA) swiftly approved the relocation and technological transformation project of GWCF. The approval means that Great Wall – as China’s leadinf cigar brand – has won a precious opportunity to realize greater development through its rebuilding after the overcoming enormous difficulties created by the devastating earthquake.
Started in 2008, the project has a total investment of RMB1 billion (US$152 million). The new site covers a total area of 455 mu (30.3 hectares). Presently, installation of cutting-edge cigar production equipment is underway at the new site. When the project is fully completed, the new plant will have an annual production capacity of 5 billion cigars or more, including 11.3 million high-end cigars, and it will be capable of generating RMB1 billion in annual taxes and profits. By then, the new GWCF will have become a leading cigar manufacturing base in China and Asia.
The project utilizes an in-depth approach to technological innovation, new product development, management and brand development. The execution will mean substantial promotion and a leap-forward in the development of domestic cigar production capabilities, creating favorable conditions for Chinese-made cigars to compete effectively in international markets, paving the way for Great Wall to maintain its status as China’s top cigar brand.
On January 24, 2011, the partially completed plant operated a successful trial production run. The factory realized normal, full-scale production in April. Upon completion of the project, GWCF will have become the largest cigar manufacturer in Asia.
Cigar production is an indispensable constituent of the domestic tobacco industry. It has won great support from STMA.
“CTIC should oblige itself to making breakthroughs in the business of cigar production in China,” STMA director-general Jiang Chengkang once said, expressing his great expectations regarding CTIC.
In its work report for 2011, the corporation once again reaffirmed its requirement for GWCF to make breakthroughs in the business of cigar production as early as possible. The report put forward the strategy of “starting up with the development of new medium-grade products, realizing breakthroughs in the development of high-grade products and attaching equal importance to both the scope of production and the structure of products.”
Taking international cooperation as a new opportunity for greater business development, GWCF is striving to realize targets set forth in its 12th five-year business development plan (2011-2015). So far, the smooth execution of the project has enabled it to obtain unprecedented opportunities on its development path.
Improving product quality Through continued efforts in building capacity and promotion, the China’s cigar-making sector has made great progress in terms of the accumulation of technology, technological equipment and funding, etc. How to realize further development in its quest to rank among the leading cigar-makers internationally on the basis of successes already achieved is therefore a question jointly considered by the domestic cigar-manufacturing segment.
GWCF has a long and successful history of cigar production. The present period of time is a crucial stage for the rapid development of China’s cigar-making sector. Judged from the perspective of long-term development of competitive brands, execution of the project has contributed to further strengthening GWCF’s already impressive hardware capacity. Meanwhile, the introduction and application of the world’s best technologies – the core efforts for the development of competitive brands – is proving to be a powerful guarantee for great improvement in the quality of the Great Wall brand cigars. The project is intended to build up the company’s comprehensive capacity. Only by continuing to search for the best technology can an enterprise succeed in fully improving the quality of its products.
In the execution of the projectthe company has actively made good use of advanced practical technology to transform its traditional production system, saving investment, requiring a shorter period of construction and generating immediate effects. It is also conducive to preventing overlapping construction, improving the structure of the industry, changing the mode of economic growth and raising the efficiency and competitiveness of the enterprise.
What is noteworthy is that the introduction and practical application of advanced technology from foreign countries is very advantageous to speeding up the development of cigar production in China. In the execution of the project, GWCF has attached great importance to introducing advanced international technology and management know-how and even launched cooperative ventures with transnational tobacco giants in jointly conducting research and development. For example, Royal Dutch Agio Cigars – a century-old transnational cigar giant – is the first cooperation partner with GWCF in this regard. The two companies have signed agreements on the introduction of advanced equipment and technology, bilateral cooperation in raw material supply, joint establishment of distribution networks, joint operation of new product development, etc. In particular, the two sides have agreed to establish Asia’s largest cigar manufacturing base in Shifang City. Presently, the project is close to completion. When completed, GWCF will take advantage of its first-rate production equipment and technology to gradually rank itself among the top tier of international cigar manufacturers, which will inevitably lead to changes in the structure of the global cigar-making sector.
Introduction and development of technology and quality control are among core efforts for the development of big competitive brands. Just by benefiting from the introduction and development of technology and quality control, the Great Wall cigar brand has realized rapid development over recent years. GWCF management has always implemented the policy of technological transformation and innovation in all processes of its systemic and structural reforms, promoting the introduction of advanced technological equipment and highly qualified management human resources in embarking as early as possible on the path of rapid development based on sufficient technological transformation and innovation.
New products
After completing the project, GWCF will take steps to comprehensively implement a strategy of “starting up with the development of new medium-grade products, realizing breakthrough in the development of high-grade products and attaching equal importance to both the scope of production and the structure of products.”
More significantly, besides maintaining its advantage as the major owner of domestic market shares, GWCF wishes to seek channels to sell its products to markets in Western countries including the US and Europe. While absorbing the first-rate technology and management know-how introduced from transnational cigar giants, GWCF will, through continued efforts of independent innovation, manage to develop new cigar products with unique characteristics that will meet the favor and consumption habits of smokers from around the world, while striving to increase its annual cigar export volume to a total of 20 million. In January 2011, a first batch of 120,000 Great Wall brand cigars was exported to Europe, which signifies that Chinese-made quality cigars are now competing with the world’s best in international market.
The execution of the project has contributed to laying a solid foundation for the growth of the Great Wall cigar brand. As a result, GWCF now has a powerful guarantee for its capacity building in terms of both software and hardware. As Great Wall is an indispensable big competitive cigar brand for China’s tobacco industry, GWCF has, in the course of development of Great Wall, found a suitable way of speeding up the development of this brand with unique characteristics of its own.
In particular, through the execution and the launch of international cooperation, GWCF has continued to accumulate and absorb valuable experience in the development of domestic cigar-manufacturing. From the gestation of the Great Wall cigar brand to continued exploration and innovation, and from actively launching international cooperation to self-improvement and capacity building, GWCF has ushered in an era of all-round development. Through the project, GWCF now ranks alongside the world’s outstanding cigar makers and brands. On the basis of the successes already achieved, GWCF is now striving to open up new horizons for its future global development.
