China Warms Up to Heat-Not-Burn

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By TobaccoChina Online

Over recent years, new types of tobacco products developed rapidly, firstly due to the continuing shrinking of the adult smoking population leading to stagnant markets, and secondly due to strengthening efforts to ban tobacco around the world. Implementing the relevant provisions of WHO’s Framework Convention on Tobacco Control (FCTC), particularly Article 8 for protection from exposure to tobacco smoke, led many countries to ban cigarette smoking in public places. Under such circumstances, market demand for new types of tobacco products has grown.

British American Tobacco (BAT) predicted in September 2015 that the global market share of a new generation of tobacco products will increase to €8.4 billion in 2020 from the level of €2.8 billion in 2015.

Researching and developing new products

Specifically, new types of tobacco products can be divided into four major categories: e-cigarettes; heat-not-burn; snus; and OTP (other tobacco products). These new-types products share three common characteristics: no burning; nicotine release; and no tar. Currently, e-cigarettes and heat-not-burn products are the leading new types. Philip Morris International’s iQOS, Japan Tobacco’s Ploom Tech, and BAT’s glo have all performed well in the market, proving that heat-not-burn tobacco products are increasingly favored by consumers.

At an e-cigarette expo in Shenzhen last April, TobaccoChina Online (TCO) reporters saw an exclusive booth for iQOS, reflecting the market potential for new types of tobacco products. In layman’s term, the so-called heat-not-burn products available are a combination between a type of heating device and tobacco products.

Though a major traditional tobacco consuming country, China has not yet presented to the market such a new type of tobacco products of its own. However, China has now turned its research and development (r&d) attention to this emerging segment.

China Tobacco Guangdong Industrial starts r&d

In an interview with TCO, representatives from China Tobacco Guangdong Industrial Co. (CT Guangdong) said that the company has participated in e-cigarettes expos for four years, and it has always attached importance to the development new types of tobacco products. And CT Guangdong started r&d on new types of tobacco products at a quite early time.

In 2013, the State Tobacco Monopoly Administration (STMA) – the regulator of China’s tobacco industry – held a national conference on tobacco science and technology, proposing that importance be attached to r&d of new types of tobacco products.  Shenzhen, in Guangdong Province, produces most of the e-cigarettes in the world, and boasts a complete industrial chain for r&d of new types of tobacco products, as well as a relatively favorable geographical advantage. It was just under such circumstances that CT Guangdong started the r&d of new tobacco products.

In 2013, CT Guangdong established a new-type products research institute which oversees organizing relevant researchers in the fields of raw materials, aromatization, formula designing, etc. r&d conducted by the company is in patent analysis, basic project research, experimental device r&d, new products r&d, etc. So far, the company applied for more than 50 patents, with 35 granted, including more than 30 patents for producing heat-not-burn tobacco products.

In basic research, CT Guangdong separately set up scientific and technological research projects in heat sources, aromatization, material basis analysis, slow release of aroma, snus, etc. By the end of 2016, the company completed the application research of heating materials, control technology, heat conduction and insulation materials, and rod core heating methods of support smoking sets for heat-not-burn cigarettes. It also completed exploratory research on heat-not-burn cigarette structure, formula and rolling technology and had completed the research of crucial technology for producing snus.

In new products development, CT Guangdong cooperated with many other enterprises and universities in solving difficult technological problems, with the focus on developing heat-not-burn products, while making efforts to develop e-cigarettes and snus at the same time. Because of strenuous efforts over the past three years, the company completed the development of several new products. In early 2016, CT Guangdong reported to STMA its progress in the r&d of heat-not-burn devices and received high comments from leaders of the department of science and technology. So far, the r&d of heat-not-burn cigarette products by CT Guangdong has advanced from the stage of laboratory to industrialization. For example, the company has completed the r&d of electric heat experiment devices for producing heat-not-burn cigarettes and portable heat devices.

For the new-type electric heat experiment device for producing heat-not-burn cigarettes, the range of its temperature adjustment is from room temperature to 600℃, and it is capable of heating cigarettes of different circumferences and different materials.

More new products from China

CT Guangdong is not the only tobacco manufacturer engaged in r&d of new tobacco products in China. In 2013, STMA established a panel overseeing r&d of new types of tobacco product in China. In 2014, it launched a major national program promoting the products.

In 2014, the State Intellectual Property Office (SIPO) disclosed a patent by China Tobacco Hunan Industrial Co (CT Hunan) – the invention of a non-burning, low-temperature cigarette product. In 2015, SIPO disclosed a patent by China Tobacco Hubei Industrial Co (CT Hubei), and Wuhan Yellow Crane Tower New Materials Development Co for a chemically heated, low-temperature cigarette, which is reportedly capable of effectively reducing the harm of secondhand smoke to the environment and human health. Also in 2015, SIPO received a patent application from of New Materials Science and Technology Co., Ltd. of China Tobacco Yunnan Industrial Co (CT Yunnan) for a low-temperature, non-burning cigarette suction material. This invention remarkably increases the sensory satisfaction gained from cigarette smoking, but also promotes safe smoking.

In 2015, a new-type tobacco products research institute was officially established in Shanghai, and will become a major base for new tobacco products r&d. Later that year, the new-type tobacco products equipment engineering research center was established in Qingdao (Shandong Province). These developments not only signify an advancement in the innovation of new tobacco products to a higher level, but also means that the industry has entered a new era.

CT Hubei completed the process of overtaking the core technology of iQOS in the its r&d of heat-not-burn tobacco products, and is in a period of transition from technological development toward production. CT Guangdong, is also at the stage of transitioning from laboratory development of prototypes toward production and marketing.

Late last April, STMA director-general Ling Chengxing said that the tobacco industry needs to seriously recognize the momentum of rapid expansion and robust growth of the new-type tobacco products market scale, consumer population, and production and marketing capacity which is emerging around the world. He urged China’s tobacco industry to build up confidence and prioritize “sharpening the new international competitive edge ”. Judged by the present situation, though the new tobacco products market in China is still in a stage of initial development, the tobacco industry of China is actively preparing to meet the growth, development, and expansion of this lucrative market.