Positive Take on Illicit Trade Opportunity

Source from:  Tobacco Reporter 04/21/2011

British American Tobacco Malaysia's managing director, William Toh, said yesterday that two surveys conducted last year by the Confederation of Malaysian Tobacco Manufacturers had shown that illicit products accounted for 38.2 per cent of the country's cigarettes market, according to a story in The Star. But, speaking after the group's 50th annual general meeting, Toh was able to put a positive spin on the situation by saying that the illicit sector of the market presented a sizeable opportunity for the company to tap into - if the illicit trade issue could be resolved. Nevertheless, BAT Malaysia expects this year to present a challenging operating environment. Toh said that the price of cigarettes in Malaysia was the third highest in ASEAN countries, after Singapore and Brunei. So this year the group aims to double its export volume to 30 per cent of its annual production with new contract customers BAT Australia, New Zealand and Japan. Exports to these countries will be in addition to those to Hong Kong and Taiwan, and the company's duty-free business. Meanwhile, BAT Malaysia is looking to sell to other BAT companies the machines it used to produce 14-piece packs, before these packs were banned in Malaysia in June last year. The machines are valued at between RM15 million and RM18 million. Enditem