Kith Holdings plans to diversify its printed packaging products manufacturing operation to include food and cosmetics packaging. General manager Paul Yau Chau-min said after yesterday's annual meeting that the firm was targeting less than 1 per cent of its sales in new categories this year. Kith also hopes to increase the weighting of its wine packaging business from 5 per cent at the end of last year to 10 per cent by the end of this year. Cigarette packaging products accounted for 93.8 per cent of turnover last year. According to Mr Yau, Kith will source paper directly from suppliers starting from the third quarter to lower costs and ensure quality. Paper costs account for about 70 per cent of production costs. Mr Yau is confident the mainland's possible entry into the World Trade Organisation will not significantly affect business. 'Mainland smokers have a developed taste for local cigarettes and will not likely switch to foreign brands en masse even if import barriers are relaxed,' he said. Increasing demand for higher-quality cigarettes and the need for quality packaging helped boost sales, Mr Yau said. Rampant cigarette piracy has seen cigarette makers increasingly forced to switch to packaging with anti-counterfeiting features. Mr Yau is confident Kith will be able to collect the $44 million loan it granted to principal customer, Yunnan Zhaotong Cigarette, before the end of August as agreed.