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Wednesday, 2 November 2016

Eastern Company meeting with Philip Morris over USD payments

Cigarette maker Eastern Company has not stopped production and has a 12-month stockpile of raw materials, Chairman Mohamed Haroun told Al Shorouk. Philip Morris had signed an agreement in April to pay Eastern in in USD for producing foreign-labelled cigarettes, the story alleges, but has instead been paying in EGP. The company then reduced output of L&M cigarettes, a top-selling brand, claiming it could not import tobacco and raw materials given the FX crisis, prompting a meeting between the two companies this week to find a solution, said Haroun. Eastern Company has alternative solutions if Philip Morris does not resume paying in USD, he added, including using a deferred payment system, issuing tenders in EGP, or a barter trade system through which Eastern company will pay offshore suppliers in-kind through shipments of commodities including cement and fertilizers.

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