Savanna Tobacco to set up factory in Mozambique

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SAVANNA Tobacco will spend at least $2 million to set up a factory in Mozambique as the cigarette manufacturer spreads its footprints in the region.

VICTORIA MTOMBA

Speaking after the tour of Savanna Tobacco plant on Monday, executive chairman Adam Molai said the company was currently exporting its products to Cyprus, Angola, South Africa and Zambia among others.

Molai said the company exports 85% of its products and 15% is sold to the local market.

“Effectively we continue to grow our footprint into the region and we have been exporting a lot of finished cigarettes into Mozambique seeing the size of the market we are seeing and opportunities to pack our cigarettes in that market.”

“We will be putting in €1million-€1,5 million equipment and the rest will be for marketing and support the growth of the market,” he said.

Molai said during the first half of this year the volumes for the company were up and expects that by year end the volumes would be 40% up compared to 2013.

He said the company has the capacity of producing 4,5 billion sticks of cigarettes, but currently it was utilising 72% of that capacity.

Molai said the company has so far invested $5 million in new equipment that packs cigarettes into small packs of twos, fives and tens in line with falling consumer demands.

Cigarette consumers prefer buying single sticks which are more affordable than packs. However, legislation prohibits the selling of unpacked cigarettes.

Molai added that the company has registered demand from the new packages as consumers demand the smaller packs as compared to the bigger ones.

The Savanna boss said the company has increased the value it got from products by 10 times since it began operations in 2002.
The company’s capacity utilisation was above 70%.

The country’s tobacco farming has been on a rebound since 2009 and this year it is expected to surpass the 200 million kg mark.
The industry has been boosted by contrac farming.

5 COMMENTS

  1. last friday i got a $8755 because i am jobless i want to continoue our study therefore,i worked hard last two week and earned $19500 i offer me friends and neighbours to do this work you want to know that how many dollars earned in last two week plz read this website to take more information

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  2. And there are crying out for FDI while our companies want to invest in a neighbouring country to their benefit. With the state of our economy & high unemployment in Zimbabwe does this make sense?

  3. Saundy, it makes sense if they sell 15% of their product locally & at the end of the day they are a local company with HQ in Zim so profits return to Zim. What I want to know is if they are cutting operations in Zim.

  4. Saundy, it makes sense if they sell 15% of their product locally & at the end of the day they are a local company with HQ in Zim so profits return to Zim. What I want to know is if they are cutting operations in Zim, like what BAT is doing.

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