BAT Zimbabwe eyes more growth

Published: 14 June 2014

British American Tobacco Plc plans to invest more capital towards its Zimbabwean business despite earlier reports that the company is planning to divest its business operations, a company official has said.

BAT has so far spent more than US$5 million over the past five years in capital investments with about 50 percent of the amount invested towards improving its manufacturing line.

The company also plans to invest heavily towards improving its marketing and distribution channels.

Despite a decline in demand on the local market BAT is currently operating at 70 percent capacity. BAT managing director Mr Lovemore Manatsa yesterday confirmed to journalists who attended a tour by the Minister of Information, Publicity and Broadcasting Services Professor Jonathan Moyo that the company plans to grow its business in Zimbabwe.

"We are here to stay as a company and the company plans to invest more towards growing the Zimbabwe business contrary to earlier reports.

"However, we invited Professor Moyo and his team to come and have a look at our operations at least for them to have an appreciation of what is happening on the ground," he said.

This comes as it emerged a few months ago that BAT had scaled down its Zimbabwean operations and is now outsourcing various local brands from its global network, raising fears of retrenchments.

Mr Manatsa said the company plans to increase its capital expenditure this year, but could not say how much would be invested. This further confirms that the company has no intentions to divest from Zimbabwe.

"In a bid to increase our footprints on the local industry, we are currently making our own packaging material as way of avoiding imports," he said.

BAT manufactures a variety of cigarettes brands which include Madison, Kingsgate and Everest among others

The cigarette manufacturing company currently has an installed capacity of 2, 3 billion cigarettes per annum but the company is operating at 70 percent capacity.

Mr Manatsa said BAT is fairly considered as an indigenous player in the tobacco manufacturing sector.

Its share Employee Share Ownership Trust was established to give employees an opportunity to participate directly in the development and growth of the company. It was introduced as part of the company's compliance with the indiginisation legislation. Employees are getting a 10 percent shareholding in the company.

With the establishment of the ESOT, BAT Zimbabwe is effectively transferring more than two million shares to its employees. At the current share price the stake equates to a total value of close to $10 million. Half of the stock will be issued as free shares to employees through the trust, while the other half are to be issued for value.

"Our Employee Share Ownership Trust has given BAT Zimbabwe employees part ownership in the company. We will also provide employees with the necessary assistance to get technical advice from within our structures," said Mr Manatsa.
- The Herald

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