BAT builds manufacturing portfolio

Published: 07 July 2014

Cigarette manufacturer BAT Zimbabwe says it is focusing on building its manufactured cigarette portfolio after stopping semi-processed tobacco exports last year.

In an interview, BAT Zimbabwe managing director Lovemore Manatsa said although they used to supply Cutrag to the Mozambique market, those exports had been stopped as the gains were "negligible".

Cutrag is semi-processed tobacco, or tobacco that has been cut into fine strips for use in cigarettes.

Manatsa said the Cutrag operations had been moved to South Africa since the operation that side had a "bigger plant."

"BAT Zimbabwe was exporting Cutrag or semi processed tobacco to its sister company BAT Mozambique but this was discontinued and moved to BAT South Africa as its impact to our bottom line was negligible and we decided to focus on the processing of finished goods for the domestic market," he said.

The local operation was now focusing exclusively on the domestic market.

"BAT Zimbabwe does not export finished goods or products. It is the only cigarette manufacturer in Zimbabwe that manufactures for 100 percent domestic consumption," added Manatsa.

Wholly focused on cigarette manufacturing, BAT Zimbabwe has an installed production capacity of 2,3 billion sticks per annum and is currently operating at around 70 percent of that capacity.

This makes it one of the most effective industries in the country at present.

Average industrial capacity currently stands at around 37 percent, according to the Confederation of Zimbabwe Industries.

But the BAT boss believes that their only limitation in this regard is depressed demand.

BAT International Holdings UK Limited holds 42,98 percent in the company while Old Mutual Life Assurance holds 11,97 percent. Employees own a combined 20,76 percent while the rest is held mainly by pension funds.
- BH24

Tags: BAT,