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Vancouver-based Poda Holdings (CSE: PODA) (FSE: 99L / OTC: PODAF), the manufacturer of heat-not-burn (HnB) smoking products, has signed a letter of intent with Landewyck Tobacco in Luxembourg to develop products for commercialisation.

Poda Holdings manufactures smoking products that mimic the sensorial experience of traditional cigarettes but without the smoke, or the smell or the tobacco. Poda’s HnB system is designed to reduce the risks associated with combustible smoking products, using proprietary biodegradable single-use pods, which are consumer and environmentally friendly.

The company’s flagship Beyond Burn Poda Pods contain a blend of pelletised tea leaves infused with synthetic nicotine, which provides adult smokers with a smoke-free alternative to their regular habit. They are the first and only cigarettes to have a completely closed end, which eliminates cleaning requirements and provides an ashless HnB cigarette.

Who is Landewyck Tobacco?

Landewyck Tobacco is a family-owned business based in Luxembourg focused on the production and sale of cigarette and smoking tobacco, with a history of more than 170 years’ trading. The group has around 40 brands, including Elixyr, Ducal, Austin, Afri, Africaine, Bentley, Che, Lexington, Maya, and Maryland, and exports cigarettes to more than 30 countries worldwide. The company is also a significant supplier of private label cigarettes. The bulk of its cigarette business (88%) is derived from international sales outside its traditional home markets of Belgium and Luxembourg.

Ryan Selby, CEO of Poda Holdings, described the deal as “a milestone in Poda’s commercialization efforts in Europe and abroad”. The strength of the deal is that it will combine Poda’s HnB technology with Landewyck’s European regulatory and distribution expertise, as well as its expertise in tobacco manufacture and brand recognition.

As a first step in the collaboration, Poda and Landewyck will start with a trial period to develop blends that could be used for potential future products.

Georges Krombach, general manager of export and new generation products for Landewyck, is expecting the collaboration “to have great success in the European marketplace. We manufacture tobacco and cigarettes at our own facilities exclusively in Western Europe, and attach great importance to maintaining the highest manufacturing, working and product standards that are socially acceptable to our consumers, partners and importers worldwide.”

The deal with Landewyck follows the key appointment of Dutch national Christoph Tepr as vice-president of European Sales & International Expansion. He has already joined Poda’s Global Advisory Board and is expected to start in his new role next week, 17 January. Tepr brings to Poda more than 15 years of commercial experience with some of the biggest tobacco and e-cigarette companies in the world. At Philip Morris, he held several key sales and management positions and was instrumental in deploying the IQOS product into the Swiss marketplace. At JUUL, he built the Swiss commercial organisation from the ground up and then restructured its German commercial organisation. At British American Tobacco, he focused on commercialising and growing their HnB and conventional product portfolio.

On his appointment, Tepr described Poda as “an agile challenger in the fast-growing Heat-not-Burn space. With their proprietary technology platform, Poda represents a rare opportunity that has the potential to capture significant market share and ultimately transform and expand application areas within the category.”

Related

Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

James Norris

James Norris

James is a highly experienced writer and editor, gained from more than 20 years in the financial services industry, in particular wealth management and asset management.

He initially worked as a financial journalist for a number of leading media brands, including the FT Group, Financial News, Euromoney and Incisive Media, covering most aspects of the asset management industry. More recently, James switched to work as an in-house content specialist for fund management and wealth management groups, including JP Morgan Asset Management, Quilter Cheviot Investment Management, AXA Investment Managers and Invesco Perpetual.

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