Malaysia will introduce a new set of policies to restructure and boost the domestic tobacco industry beginning Jan 1, a senior minister said.

Primary Industries Minister Lim Keng Yaik said the aim of the new policies is to ensure the industry remains efficient and competitive when it is liberalised following the introduction of the Asean Free Trade Area Common Effective Preferential Tariff (Afta-CEPT) in 2010.

The ministry also plans to establish a RM60 million special fund to provide loans to tobacco curers and growers, Lim said in a Bernama news agency report late yesterday.

Local tobacco

Under the new plan, tobacco curers and growers would get RM2 for every kilogram of tobacco produced, he said.

Lim said the incentives would be borne by the three major cigarette manufacturers - British American Tobacco, JT International and Philip Morris (Malaysia) Sdn Bhd.

The cigarette manufacturers would bear the whole cost of fertilizer and chemicals used for pest and disease control, he added.

Lim said the three major cigarette manufacturers are required to use 70 percent local tobacco in the manufacture of cigarettes for the domestic market. - AFP.