BAT submits second compliance plan

Published: 05 February 2014

CIGARETTE manufacturer British American Tobacco (BAT) Zimbabwe has submitted to government its indigenisation and economic empowerment compliance plan for the second year.

The Indigenisation and Economic Empowerment Act compels foreign-owned firms with a minimum capital of $500,000 to cede 51 percent of their shareholding to locals.

"We have submitted to the minister (Francis Nhema) our indigenisation plan for the second year but obviously, I cannot comment on that. As we speak now, we are waiting for the response," said BAT Zimbabwe managing director, Lovemore Manatsa in an interview on the sidelines of his organisation's first quarterly media briefing in Harare on Friday.

Under the Indigenisation and Economic Empowerment law, companies are required to ensure they are 26 percent compliant with the Act in the first year of implementation, 36 percent in the second year, 46 percent in third year and 51 percent in the fourth year.

Manatsa said BAT was at the moment 26 percent compliant with the Indigenisation and Economic Empowerment Act.

BAT Zimbabwe is among the top 10 companies in terms of capitalisation on the Zimbabwe Stock Exchange.

Since the adoption of a multi currency system in February 2009, the ZSE-listed entity has spent more than $5,4 million on manufacturing, marketing, information technology and administration.

"In the next five years, we are focusing on organic growth for the business underpinned by appropriate good corporate governance," said Manatsa.

"Like everybody else, we have also been affected by the economic challenges the country is reeling under, but despite those challenges, it is a question of the strategies that you take to keep your head out of water."

Asked to comment on recent reports in some sections of the media that BAT Zimbabwe was planning to shut down operations in the country, he said:

"We're here to stay; we cannot be doing (investing) what we are doing right now if we intended to divest from Zimbabwe.

"It's not logical that we invest fully aware that we intend to shut down operations. However, because of freedom of speech, people are free to write or say what they want."

He said BAT Zimbabwe was operating at 65 percent capacity utilisation level.

The ZSE-listed firm manufactures a variety of cigarette brands that include Madison, Kingsgate, Everest, and Dunhill and produces about 130 million sticks per month.

Through the Employee Share Ownership Trust, BAT Zimbabwe has given its employees an opportunity to participate directly in the development and growth of the company.

The trust was introduced as part of the company's compliance with the indigenisation legislation and employees are getting a 10 percent shareholding in the company.
- chronicle