Japan Tobacco (JT) has entered into an agreement to acquire shisha manufacturer Al Nakhla Tobacco Company, significantly expanding its interests in the Middle East and Africa.
Nakhla, which according to JT holds a 70% share of the shisha (or waterpipe tobacco) market in Egypt, is currently controlled by BATATA and has headquarters and two factories in Cairo and Shebin El Kom. The deal is expected to be completed by the end of March.
Exporting to 85 countries, primarily in the Middle East and North Africa, Nakhla’s total sales volume was approximately 24,000 tons in 2011 (roughly comparable to 24 billion cigarettes by volume), through brands including El Nakhla, Classic and Mizo.
Japan Tobacco International (JTI) Regional President of Middle East, Near East, Africa, Turkey and World Wide Duty Free Fadoul Pekhazis said: “Our acquisition of Nakhla offers an excellent opportunity for growth in the waterpipe segment and widens our brand portfolio, in line with our strategy to address the needs of adult consumers across a range of tobacco product categories.
“Furthermore, the acquisition enhances JTI’s geographical footprint in the Middle East and Africa, and over the long-term, provides a platform for JTI to participate in the sizeable cigarette market in Egypt.”
Nakhla’s net sales were approximately US$110 million in 2011 and the company has around 1,900 employees.
