BAT targets 1,45bn cigarettes as revenue slumps

HARARE - British American Tobacco Zimbabwe (BAT) targets to produce 1,45 billion cigarettes this year on the back of surging demand.

Its managing director, Lovemore Manatsa, said while the target is way behind the company’s peak of 2,3 billion in 1999, BAT would capitalise on a stable economic environment.

“We are confident that our strategies remain appropriate, that our brand portfolio is consumer relevant and that the excellent quality of our people and processes will deliver the sustainable competitive advantage required for future success and to the benefit of shareholders,” he said.

This comes as Zimbabwe’s cigarette industry volumes slumped 17 percent last year due to the on-going affordability and liquidity challenges bedevilling the country.

Manatsa noted that the successive increases in excise duty which impacted cigarette retail prices in 2011 and 2012 were compounded by the unavailability of coins resulting in consumers often paying higher prices than those recommended by manufacturers.

Meanwhile, BAT’s revenue in the full year to December 2013 declined by 14 percent to $44,6 million from 51,2 million recorded in the prior year.

Peter Doona, BAT’s finance director, said the decrease in revenue was attributed to the discontinuation of cut rag exports in 2013 to allow management to focus on building the manufactured cigarette portfolio.

“For anchored cigarettes, price increases net of excise on key brands in December 2012 mostly offset the impact of lower sales volumes,” he said.

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