BAT Tops Blue Chip Counters

Source from:  The Herald 09/21/2009

Buoyed by its bullish trend on the Zimbabwe Stock Exchange and growing demand for its products on the local market, British American Tobacco Zimbabwe (Holdings) Limited has stood the test of time to emerge as one of the leading blue chip counters on the local bourse, with a market capitalisation of over US$46 million. Emerging from economic challenges of yesteryear, the cigarette manufacturing company continues to hold pole position in the local cigarette market with a brand portfolio boasting long-standing and familiar brand names like Madison, Everest, Newbury, Kingsgate and Berkley. Demand for these cigarettes has resulted in the maximum utilisation of the firm's assets and the introduction of two shifts at the BAT Zimbabwe factory in Southerton. In its half-year results to June this year, British American Tobacco Zimbabwe Limited reported an increase of 18 percent in cigarette sales volumes against the same period last year. Competitor cigarette brands have surfaced in the local market in recent years and in light of the global drive for stricter regulation on the marketing of tobacco products, BAT Zimbabwe remains committed to growing the business and consumer base, responsibly. British American Tobacco companies, globally, strive to adhere to internally-drafted, self-imposed Interna-tional Tobacco Marketing Standards. These standards, applicable to BAT companies worldwide, detail restrictions on the marketing of BAT tobacco products in electronic or print advertising, prescribe the use of health warnings on the dangers of smoking, restrictions on billboard advertising and on sponsorship and promotional activities. The standards are a pro-active self regulatory mechanism to ensure that the harmful effects of smoking are not deliberately targeted at vulnerable groups particularly children. Zimbabwe has tobacco control legislation as promulgated in the Public Health (Control of Tobacco) Regulations Statutory Instrument 264 of 2002. Reflecting on BAT Zimbabwe's performance and projections for the future, managing director Mr Lovemore Manatsa, commonly referred to as LT, told Herald Business that all employees and interested stakeholders were committed to upholding the letter and spirit of the IMS as they applied across the globe. "We strive to be responsible and we are grateful for the support we have received from the local market. We have played our part and we have also engaged our competitors and we have highlighted to them the existence of the legislation on the marketing of tobacco and the need for a responsible outlook and attitude in our industry given the global trend. "Going forward, we remain cautiously bullish and will strive to maintain our position as one of the top performers on the ZSE." As part of its corporate social responsibility programme, BAT Zimbabwe currently supports 13 undergraduate students at universities countrywide under its Undergraduate Scholarship Scheme. About 52 students have benefited from the scheme since its inception in October 2004. LT vividly recalls his appointment as BAT Zimbabwe's managing director on September 15 last year. "You will recall that on September 15 last year two significant events took place. One of them was the signing of the Global Political Agreement in Zimbabwe and the other was the collapse of the Lehman Brothers in the US signaling the beginning of the global economic crisis. The economic conditions in the country then were pretty tough and the global outlook was grim. However, with the advent of dollarisation the business is now in a reasonably good shape and the volumes are growing every day." British American Tobacco is in partnership with a local tobacco merchant that contracts small-scale and commercial tobacco growers to support BAT Zimbabwe's leaf demand. This partnership has yielded the securing of 15 millionkg of the gold leaf for the company this year. The local BAT operation consumes only 10 percent of the total leaf produced through the partnership, the rest is exported to sister companies globally. The BAT Zimbabwe Leaf Operations Division is also engaged in tobacco production initiatives. The initiative includes afforrestation through the planting of eucalyptus and indigenous trees to mitigate the cutting down of natural forests for tobacco production and domestic use. The division also runs an Elimination of Child Labour campaign in the tobacco growing regions in which the partnership is active. With regard to tobacco production LT was convinced that Zimbabwe still held an important position in the global tobacco market despite the challenges in recent years. "In the new economic environment, farmers are getting real value for their crop and quality and yield are the key drivers for their growth. The quality of leaf is still top of the range and compares favourably with leaf from Brazil and the United States. There is still a lot of demand for Zimbabwe tobacco." Enditem