History
A major objective of China National and the STMA has been modernization. As recently as the 1980s, China's independent tobacco factories used outdated equipment to the extent that some processes were even carried out by hand. To accomplish their goal of modernization, the STMA allowed a small number of foreign companies into the country, in exchange for modern equipment. Though deals generally favoured China, it allowed foreign companies to gain hard-to-come-by connections within China, and at high levels within the tobacco monopoly itself. The acceptance of foreign competition sparked a massive demand for tobacco production equipment in the 1990s, which has since slowed. However, major factories in China now count their production of cigarettes in tens of thousands per hour.
At the same time, China National has consolidated its factory base; currently there are 130 cigarette factories in China, compared with a 1997 number of 180. To further their goal of consolidation China National plans to reduce the number of factories below 100 in the near future. This has led to increased efficiency within the industry, allowing for greater production and brand variety than were possible before. In fact, many brands made by only one or two small regional factories have been licensed to large factories, becoming nationwide successes.
Read more about this topic: China National Tobacco Corp
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