ZIMBABWE Stock Exchange-listed manufacturing concern British American Tobacco Zimbabwe (BAT) says cigarette volumes for the year to date missed the projected target due to an upward revision in excise duty.
Report by Bernard Mpofu
Official statistics show that the cigarette maker was projecting 700 000 million sticks during the first six months of the year.
BAT managing director Lovemore Manatsa yesterday told NewsDay on the sidelines of the company’s annual general meeting that the delays in running the ethanol plant in Chisumbanje, a key market for the company, had also affected revenue inflows.
“Volumes were 13% down on budget. That is a result of the excise increase which happened in December last year,” said Manatsa.
“We have got a number of trade related initiatives that are in motion right now. We have the Madison equity campaign where we are just emphasising the equity in our core brand. Our market share is stable, remember the excise duty increase was affecting the whole industry, so I wouldn’t know how the other guys are performing.
“We are listed so we tend to give our numbers out. I would assume everbody in the fast-moving consumer goods industries is also experiencing the same.”
Turning to the company’s plans in complying with indigenisation and empowerment regulations compelling foreign firms operating in Zimbabwe to sell controlling stakes to locals, Manatsa said plans were underway to submit the plan during the second half of the year.
The company is one of the government’s targets under the controversial policy that has already seen many foreign-owned mining companies complying.
BAT has already partially complied with the regulations after it surrendered 10% of its stake to an employee share ownership trust (ESOT).
The company also relinquished 10,74% into a tobacco empowerment trust targeting young indigenous farmers.
Official figures show that before surrendering the stake to the ESOT, local investors held 6,22% of the BAT’s issued share capital.
“We are working on a number of scenarios in consultation with other key minority shareholders. We should be complying by October, so between now and October we need to come up with a plan which we will then discuss with the Ministry of Youth Development, Indigenisation and Empowerment,” he said.