BAT scales down Zimbabwe operations

via BAT scales down Zimbabwe operations November 15, 2013  By Chris Muronzi Zimbabwe  Independent

BRITISH American Tobacco (BAT) Zimbabwe Holdings Ltd is scaling down its operations in the country amid indications the cigarette maker could resort to outsourcing various local brands from its global network, raising fears of retrenchments.

This comes as it emerged BAT could be mulling ceasing all manufacturing operations in Zimbabwe.

Well-placed sources within the company said BAT is now manufacturing the Madison 30 pack in South Africa for sale in Zimbabwe, and has stopped cut rag operations for Mozambique, an indication the firm could soon be exiting the Zimbabwe market.

“Initially, only the Dunhill Brand was coming from South Africa,” said a BAT source. “Now both Madison and Dunhill are coming from there.”

But the group says it’s staying put in Zimbabwe.

“As a global company we pride ourselves in the diversity of our teams and the opportunities that our company offers for training and international exposure for local and international employees and that our Zimbabwe operation, as situated in a strategic international tobacco market, is considered an important destination,” said BAT in a response to questions sent to them.

“Given this global platform, BAT Zimbabwe can, and has, taken a strategic decision to leverage the machine capacity installed in one of the company’s hub factories to offer our consumers the innovation of a Madison 30s pack format. Our manufacturing facility in Zimbabwe continues to produce at full capacity all our quality local brands in the 20s and 10s formats.”

Sources said the group recently dismissed several of its Bulawayo-based staff members. But the company avoided responding to the labour issue in its response to questions from the Zimbabwe Independent.

The company said: “BAT Zimbabwe (BATZ) continues to be a strong business and counter on the Zimbabwe Stock Exchange.

“Through our Employee Share Ownership Trust we have given employees the opportunity to become part owners in the business towards building the long term sustainability of the business.”

BATZ was last year accused of industrial espionage after it emerged its competitors –– Kingdom, Savanna Tobacco, Breco (Fodya), Cutrag, Trednet and Chelsea –– had lost cigarettes valued at R100 million to armed hijackers in just over a year. The cigarettes were mostly destined for South Africa.

BATZ, the largest cigarette manufacturer in the country, firmly denied the allegations from competitors.