British American Tobacco plans to step up its cigarette production in Russia by one-third, BAT Russia managing director John Taylor said at a briefing in Moscow.

BAT currently has the capacity to produce about 88 billion cigarettes per year, however to become the number one tobacco company in Russia it needs to produce 110 to 120 billion cigarettes per year, Interfax news agency quotes Mr Taylor to say. The company has no intention to acquire new production facilities in Russia, he elaborated, but lays stress on ramping up operations of two of the three existing plants, those located in St Petersburg (former Rothmans-Nevo) and Saratov. The investment plan has still to get approval of the group’s board in London. After that a formal announcement of the investment cost could be expected, Mr Taylor said. In the meantime, BAT Russia has posted most impressive results for the first half of the year and brought its market share to 20.7 per cent, Mr Taylor told the briefing. The company’s newly launched and rebranded products Kent Mintek, Vogue Arome and Pall Mall in the new package have shown confident sales growth in their market segments. Sales of Rothmans and Yava Gold have increased by 11.2 per cent and 8.5 per cent correspondingly over Q2, leaving far behind their segments’ average pace, and Alliance is now the leader among the popular value cigarettes. BAT’s new strategies for Russia and CIS include production outsourcing. The company has recently moved manufacturing of ovals to the Pogar cigar and cigarette factory of the Bryansk region and launched a joint project with the Grodno-based tobacco factory of Belarus for production of international cigarette brand Alliance, Mr Taylor went on. To improve its logistics, the company has launched its biggest investment project in Europe, creating a logistics centre in St Petersburg, which is currently under construction, he reminded. (vt)