3 February 2014

Zimbabwe: BAT to Invest More

BRITISH America Tobacco Zimbabwe has spent more than US$5 million over the past five years in capital investments, the company's finance director Mr Peter Doona said.About 50 percent of the amount was invested in manufacturing and the company is now operating at 65 percent capacity.

Mr Doona said the company would increase its capital expenditure this year, but could not say how much would be invested. This further confirms that the company has no intentions to divest from Zimbabwe.

"We will increase our capital expenditure this year to enhance our manufacturing," he said.

BAT manufactures a variety of cigarettes brands which include Madison, Kingsgate and Everest.

The company enjoys 79 percent of the market share and produces about 130 million sticks per month, BAT chief executive Mr Lovemore Manatsa said.

The company currently has close to 100 workers on its payroll. BAT is among the companies that are complying with the country's empowerment laws.

Its share Employee Share Ownership Trust (ESOT) was established to give employees an opportunity to participate directly in the development and growth of the company.

It was introduced as part of the company's compliance with the indigenisation legislation. Employees are getting a 10 percent shareholding in the company.

With the establishment of the ESOT, BAT Zimbabwe is effectively transferring more than two million shares to its employees.

At the current share price of US$4,50, this equates to a total value of close to US$10 million.

Half of the stock will be issued as free shares to employees through the trust, while the other half are to be issued for value. BAT said "this speaks directly to the Government's indigenisation objectives of creating broad-based empowerment through direct ownership to those who would otherwise not have had this opportunity."

"Our Employee Share Ownership Trust will give BAT Zimbabwe employees part ownership in the company. We will also provide employees with the necessary assistance to be able to access those shares that will be issued for value, further enabling them to increase their holding in the company," said Mr Manatsa.

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