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ZAMBIA

BAT to end cigarette manufacture in Lusaka

04 Apr 2006. BAT's has proposed a change in the company's strategy for Zambia, to focus only on the marketing and distribution of cigarettes.

It proposed the cessation of cigarette manufacturing at the company's Lusaka factory by 30 June 2006 and the disposal of the current head office and factory and any other assets no longer required by the company following the cessation of cigarette manufacturing.
About 80 workers will lose jobs as the multinational company closes down its manufacturing plant opting for importation and distribution of cigarettes from Kenya and South Africa. The directors estimate that the costs of the company's reorganisation will not exceed K 10 billion.
Gary Fagan, a non-executive director who represents BAT on the board, said he was concerned by the perception that BAT was liquidating the company and closing the business.
"The business is here to stay. The reality is that we have capacity all over the world. As a group we need to ensure that our investment is in the right scale. Under the current model, within a year we would have to make huge investments in machinery. It is unrealistic to make that investment in a market like Zambia," he said. BAT holds 97 per cent of the Zambian cigarette market. Following BAT's global restructuring process, operations in South Africa, Malawi, Uganda, New Zealand and England have been affected likewise. (pi)