The Herald (Harare)

22 April 2014

Zimbabwe: Savanna Decries Industrial Espionage

Savanna Tobacco says industrial espionage by its tobacco industry arch rivals is suffocating its potential and capacity to increase exports by a factor of at least 50 percent.

Executive chairman Mr Adam Molai said in an interview last week that customers were being haunted and their products confiscated in what could throw the victims out of business.

Mr Molai said Savanna, one of Zimbabwe's biggest cigarette makers, could instantly increase exports by 50 percent if the issue of the alleged industrial espionage is resolved.

He said customers risk losing all their capital to well planned illegal harassment by its fiercest industry competitor.

This comes after Savanna spent over 5 million euro ($6,8million) over the last five years towards building production capacity and was now focusing on optimal exploitation of this capacity.

"We can increase exports by a minimum of 50 percent if authorities play their role by making sure these activities are stopped.

"We continue to face challenges where customers trying to buy products for exports are followed, ferreted and harassed," he said.

Mr Molai said investment over the last five years has created capacity that the company is now working to harness optimally, but industrial espionage has been a huge let down.

Savanna has installed capacity of over 4,5 billion sticks per year. The firm has improved output from 3 000 master cartons in 2004 to between 35 000 and 40 000 master cartons monthly.

The executive chairman's remarks came as he stressed the need to maintain growth in exports saying this remained critical in improving liquidity while hard currency would become more critical when Zimbabwe recalls its own currency.

According to Savanna Tobacco, reports have been made to authorities, but no action has as yet been undertaken on this. The company exports cigarettes to most regional countries.

British American Tobacco Zimbabwe was recently caught in an intricate web of controversy over allegations of employing industrial espionage tactics against its competitors, Kingdom, Savanna Tobacco, Breco, Cutrag, Trednet and Chelsea although this has remained difficult to prove.

However, its handlers have hitherto courted similar controversy on the continent with media reports alleging this is the group's modus operandi in other markets in Africa.

According to media reports in Nigeria, in April 2002 a legal team from South Africa's Port Elizabeth obtained urgent court orders in three SA High Courts, sanctioning them to raid offices of BAT, South African Revenue Services and a firm of private detectives called Forensic Security Services.

Three high court judges ordered searches at BAT South Africa offices in Durban, Johannesburg and Pretoria, including the offices of the Sars and Forensic Security Services, a private investigating firm allegedly hired by BAT.

In its court application, Apollo Tobacco accused BAT of plotting with tax authorities and private detectives in "industrial espionage".

Apollo alleged BAT conspired with the Sars officials to obtain confidential information about Apollo's business operations.

Although the raids on BAT offices yielded incriminating documents from seized computers, BAT denied it had done "anything wrong to undermine Apollo Tobacco's legitimate business".

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