Egypt Crisis Fingered For Drop In Kenyan Tobacco Exports

Source from:  Ventures Africa 10/24/2013

Kenya's Tobacco manufacturer, British American Tobacco (BAT) Kenya, has attributed the drastic fall in export revenue to the on-going crises in Egypt.

Official trade data reveals that sales to the troubled North African country dropped by Sh1.9 billion ($22.4 million) in the first 8 months of the year, coinciding with the escalation of violence that has hampered economic activities following the ousting of former president, Mohamed Morsi.

Earnings from Tobacco related exports, according to Kenya's Association of Manufacturers (KAM), also experienced a steep dive – dropping 87 percent from Sh2.3 billion ($27.1 million) last year to Sh419 million ($4.9 million) in 2013.

NSE-listed BAT, Kenya's largest manufacturer and exporter of semi-processed leaf, noted that though the reduced foreign income will impact its revenue turnover, improved domestic sales has helped cushion the effect on total income.

"Gross turnover went up by 4 percent during the six months to June 30, 2013. This increase reflects a 7 percent growth in domestic and export volumes over the prior period as well as the impact of improved mix and pricing on domestic sales," said BAT in an overview of half-year 2013 results.

"These increases compensated for lower cut rag [semi-processed leaf] exports over the period. Net revenue remained stable at Sh9 billion reflecting the higher turnover offset by higher excise and VAT."

According to Kenyan newspaper, Business Daily, Tobacco exports account for over 10 percent of the country's trade supply to Egypt. Enditem