2011 Annual Report


Efficient Manufacturing

We operate 56 production centers in 35 countries, ranging from highly automated facilities, as in Bergen-op-Zoom in the Netherlands and Berlin in Germany, to our hand-rolled cigarette facilities in Indonesia. Our ongoing focus is on performance and continuous improvement, with an emphasis on the quality of production to meet both regulatory requirements and adult smoker preferences. In 2011 we exceeded our one-year gross productivity and cost savings target of $250 million, predominantly driven by improvements made in our factories. These included product blend and specification rationalization and streamlining of our manufacturing processes.

Environmental Sustainability and Safety

As the leading international cigarette company, we also aim to be an industry leader in environmental sustainability and safety. Reducing our impact on the environment in a sustainable manner and protecting our workforce are not only the right things to do, but may also contribute positively to our future business performance. For example, we recognize that climate change is a key concern. In 2010 we set ourselves the goal of reducing CO2 emissions, energy consumption, waste and water in our manufacturing facilities by 20% by 2015. Similarly, we are committed to reducing our overall company carbon footprint by 30% by 2020.