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Bird’s eye view of the gigantic GDGL factory grounds. Photo credit: Huabao Group
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Slurry RTL production line at Huabao’s PT. Warlbor International. Photo credit: Huabao Group
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Golden Leaf’s (Huabao) papermaking RTL line. Photo credit: Huabao Group
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Research and QC lab at PT. Warlbor International. Photo credit: Huabao Group
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Various types of non-tobacco RTL produced at Reascend. Photo credit: Reascend
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Non-tobacco RTL production at Reascend. Photo credit: Reascend
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Reascend’s enormous research and production facility near Kunming, China. Photo credit: Reascend
Licensed Chinese exporters can help alleviate reconstituted shortages elsewhere.
Sharply increasing demand for reconstituted tobacco leaf (RTL), primarily by a booming heated tobacco product (HTP) sector, has in recent years frequently led to shortages of a commodity that was previously in plentiful supply. While merchants and traders try their best to fulfill orders, they do not always succeed.
As manufacturers desperately scour the market to re-stock, this can mean delivery delays or inferior RTL quality at best, or temporary production downtimes at worst. But it doesn’t seem to cross the minds of some procurers to perhaps turn their eyes to China. While US firms may have trouble obtaining Chinese RTL due to the ongoing trade war between the two countries, factories elsewhere should actually not be finding themselves in that same conundrum. Not only are there Chinese companies that either produce or have access to sometimes huge volumes of RTL of all processing types, but many among them also hold export licenses from the State Tobacco Monopoly Administration (STMA) to serve customers abroad.
Huabao: everything tobacco at one place
Huabao International Holdings Limited (Huabao Group) has matured into one of China’s largest and most prolific conglomerates involved in tobacco and next generation products (NGP). Having set up several subsidiaries (including one in Indonesia), the group has invested tens of millions of dollars in infrastructure, machinery, and r&d. As such, Huabao can supply three processing types of RTL: papermaking type, slurry type, and airlaid type. The exception is recon manufactured in the dough process (a.k.a. rolling type or band-cast type).
“While we do have laboratory facilities at [our subsidiary] Guangdong Golden Leaf Technology Development Co. Ltd. to research dough process reconstituted tobacco leaf, we lack actual production equipment,” a spokesperson for Huabao Group’s tobacco raw materials division told Tobacco Asia, wishing not to be identified. “Huabao has not encountered sufficient market demand for dough process RTL and, considering investment factors, the company so far has not proceeded with production line procurement,” the spokesperson reasoned. But, there still are the other RTL types, and those should satisfy the requirements of pretty much every cigarette or HTP manufacturer.
The papermaking process
Arguably, the most widely-used type of recon is that manufactured in the papermaking process. It is deployed in both combustible cigarettes and HTP. One of its pronounced advantages is that a variety of unsorted raw tobacco waste – i.e. stems, fines, scraps, etc. that is mixed in with non-tobacco related materials (NTRM) – can be deployed in its production, effectively broadening the utilization scope of raw materials. By premixing the varieties from different origins, production time is reduced while product stability can be better managed. As raw material solubles and fibers are separated during the papermaking process, the final product’s quality can be controlled. The process also allows for an adjustment of the product’s physiochemical properties in alignment with the different needs of manufacturers.
The slurry process
Slurry type RTL is predominantly deployed in HTP. For instance, PMI’s IQOS uses aligned slurry type RTL strips. The process largely retains natural tobacco’s original combustion-smoking quality and the chemical composition of natural tobacco. Low-temperature drying minimizes changes in the tobacco’s inherent chemical composition, its combustion behavior and color. Slurry type RTL has a lower density and looser structure compared to natural tobacco leaf, resulting in superior combustibility. It also acts as an effective carrier for a multitude of functional components (e.g. nicotine, flavors, etc.) while higher smoke concentration and prolonged sensory persistence.
Notably, the tar generation of slurry type RTL is approximately 25% lower than that of natural tobacco leaf. Slurry type RTL’s sheet surface displays dual morphology, with one side being relatively smooth, the other being slightly textured. Last but not least, it demonstrates excellent filling power due to thorough blending of adhesives, fibers, and finely ground tobacco waste during pulping. Its tensile strength is comparable to that of papermaking type RTL.
The airlaid process
Usable in cigarettes and HTP alike, airlaid type RTL has a reputation for being the most environmentally-friendly type due to its special production process. Its physical and chemical specifications, including adding supplementary substances (flavors, nicotine, etc.), can be controlled quite flexibly. Other advantages of airlaid type RTL are lower tar and carbon monoxide (CO) release under similar heating or combustion conditions. Its production process is rather similar to that of filter or fibrous insulation sheets, whereas tobacco waste fibers are “blown” by a strong, low-temperature airstream onto a surface in one layer after subsequent layer until the desired thickness is achieved. Airlaid type RTL is noted for largely retaining the high flavor, strong aroma and, thus, sensory properties of natural tobacco leaf.
The dough process
Also known as rolling process or band cast process, the dough process is reputed to reduce water consumption by 30-40% when compared to the paper-making process. It also reduces energy consumption. In simple terms, RTL is produced by mechanically “pin-rolling” out a dough-like homogenized paste of tobacco material, water and additives into a long, uniformly thin strip. The resulting product boasts enhanced tensile strength and flexibility that allows it to be processed similar to natural tobacco leaf.
Facilities in China and Indonesia
Huabao Group presently operates two RTL production facilities. One of them, Guangdong Golden Leaf Technology Development Co. Ltd (GDGL), is located in China. The other, PT Warlbor International Indonesia (PTW), has been set up on the Indonesian island of Batam, which is located just a short distance off the southern tip of Singapore. The island in recent years has developed into some sort of a hub for NGP and HTP firms, many of them owned or co-owned by Chinese investors. By its own accord, Huabao invested US$17 million into RTL production at PTW, the facility occupying a total land area of 16,000 sq.m, including a factory and warehouses with a combined building area of 8,000 sq.m.
GDGL operates a papermaking process RTL production line, a slurry process RTL production line, and an airlaid process RTL production line. GDGL’s papermaking process RTL line was China’s very first and it remains one of the largest, boasting an annual production capacity of 30,000 tons. The Huabao spokesperson interviewed by Tobacco Asia also claimed that “GDGL currently has the world’s only airlaid process RTL production line, with an annual output of 1,000 tons.” As slurry process RTL is in very high demand worldwide by HTP manufacturers, production lines for this type are in operation at both production sites; at GDGL with an annual output of 600 tons and at PTW with an annual capacity of 3,000 tons.
Yunnan Reascend: champion of novel tobacco research
Based in southwestern China, Yunnan Reascend Tobacco Technology (Group) Co. Ltd. is perhaps China’s most diligent researcher into novel tobacco technologies. The company operates more than 25,000 sq.m. of lab research space, has to date secured over 120 patents, registered 60+ brands, contributed more than 600 research papers, and has received well over 100 science and technology awards. The company slogan “From seeds to smoke; from traditional tobacco to novel tobacco; from research to production line – we are the service provider of total solutions” pretty much describes the enormous scope of its activities.
Herbal recon sheet readily available
When it comes to RTL, Reascend is among the three shareholders of the Reconstituted Tobacco Company of China Tobacco Yunnan Industrial Co., Ltd. that manufactures and supplies paper-making type sheets, and which is thus in a position to supply the commodity. Reascend itself is not licensed to manufacture tobacco-containing RTL in-house. However, according to a company spokesperson, Reascend has over the past two decades accumulated a wealth of knowledge in the development of both tobacco and non-tobacco RTL and designing RTL production lines.
Furthermore, in response to growing demand by a burgeoning NGP sector, Reascend has developed several categories of non-tobacco papermaking and slurry type recon sheet that uses herbal raw materials such as menthol leaf and tea leaf. “These types of non-tobacco recon can be used in certain varieties of HTP, hand-rolled cigarette tobacco mixtures, or cigarillos,” the spokesperson explained.
RTL is by no means “inferior”
Occasionally, the general public deems tobacco recon sheet as “inferior” when compared to “real” tobacco leaf. Some critics say RTL basically were little more than worthless waste that tobacco manufacturers slip into their products to “deceive” end consumers and turn very tidy profits. But the Reascend spokesperson – in unison with practically everybody else in the industry – strongly objected to such criticism. “It’s unfair to put an ‘inferior’ tag on RTL. Its manufacture consists of a series of sophisticated processes, including selection and screening of raw materials, formulation design, pre-treatment, modification of flavor contents, quality assessment, and a whole lot more,” he insisted.
Only high-quality tobacco scraps and other by-products are selected, and not, as so many consumers appear to mistakenly believe, “worthless waste”. “As a result [of that careful manufacturing], the final RTL product is always comparable to - and sometimes even better than - average tobacco laminae,” he said. He added that the real point was that by converting fines, scraps and stems into RTL, a considerable amount of perfectly good tobacco that otherwise would be lost can now be reused in cigarettes and HTPs, improving the utilization rate of a precious raw material.
Global demand will only rise
The Reascend spokesperson also predicted that the global demand for RTL, especially of the slurry process type, will further grow in the medium to long term. “The increasing market shares of reduced risk tobacco products (RRTPs) and next generation products (NGPs) play an important role in this development,” the spokesperson said, adding that PMI’s 2023 annual report stated a growth of 3.7 million additional IQOS users around the world. With increasing numbers of smokers switching to HTP in the future, demand for RTL will undoubtedly be trending up, the spokesperson said.
This opinion is also shared by Huabao Group, whose spokesperson told Tobacco Asia that international tobacco companies regard HTP as an important product segment for strategic transformation and sustainable development. “Major tobacco companies have consistently raised the market scale and sales prospects of HTPs, which will contribute to an increasingly concentrated HTP market in forthcoming years,” the Huabao spokesperson elaborated. More smokers than ever were turning to HTP or other lower-risk products, and that will give increasing business opportunities to RTL suppliers. But when these exiting developments should bring on occasional supply bottlenecks, Chinese RTL companies may just be the right mitigation ticket.