“Transforming Tobacco” plan launched as BAT marks 50 years on NSE

British American Tobacco is gearing up to drive in transforming tobacco ambition as the company marks 50 years on the Nairobi Securities exchange.

The cigarette manufacturer has reiterated its commitment to continue delivering shareholder value through its ‘Transforming Tobacco’ ambition.

The tobacco firm which has been listed on the Nairobi Securities Exchange since 1969 held its 67th Annual General Meeting in Nairobi on Friday.

During the AGM, shareholders approved a final dividend of KSh 31.50, bringing the total dividend for 2018 to KSh 35 per share.

This accounts for 86% of earnings paid as dividends, representing an increase from the 78% paid in 2017.

BAT Kenya Managing Director, Beverley Spencer-Obatoyinbo commented: “As consumer preferences continue to evolve, so does our business.

“The advent of new technologies and potentially reduced risk products in the global tobacco industry, offers an opportunity for BAT Kenya to realize its ‘Transforming Tobacco’ ambition and provide consumers with broader choice, more innovation, less risk.”

Potentially reduced risk products include products that do not contain tobacco and those which heat, rather than burn tobacco, presenting possible opportunity to reduce the harm associated with conventional cigarettes.

“We believe that through offering our consumers a range of potentially reduced risk products, our shareholders will own an even more sustainable and profitable business, whilst society could benefit from real progress in harm reduction.

“Despite these exciting industry developments, our business will continue to deliver results based on our core business – cigarettes; an area where illicit trade continues to pose significant challenges regardless of heightened attention from the authorities.

“Research commissioned in 2018 found that 14.1% of all cigarettes sold in the market were illicit, up from 12.4% in 2017. These are predominantly cigarettes which are produced in Kenya and destined for export to a lower tax market.

The company has also expressed their disappointment with the growing numbers of cigarettes with fake tax stamps.

“In total, this means that the illicit trade in cigarettes has denied as much as KSh2.5 billion annually in revenue to the Government. This equates to an estimated 4,200 affordable housing units for year 2019/2020 out of the annual target of 200,000 units.

“We therefore continue to call upon the authorities to take urgent action to investigate the source of these products and put in place the necessary measures and safeguards to protect the consumer, safeguard revenues and facilitate legal manufacturing growth.”

BAT Kenya Chairman, George Maina said: “Importantly, regulatory and fiscal stability is crucial to foster sustained growth for our business, enable the advancement of manufacturing as a key driver of the Government’s “Big Four” agenda and enhance the ease of doing business in the country.

“As one of the country’s top exporters, we applaud the Government’s efforts to address non-tariff barriers put in place by neighbouring countries.

“However, more needs to be done to ensure that protectionist measures that do not comply with the East African Community’s free trade agreement are dismantled as quickly as possible.

“We are excited about BAT Kenya’s future. Through its market-leading brands, “Transforming Tobacco” ambition, talented people and valued partnerships, the company looks set to deliver continued value to its shareholders while investing in a sustainable and successful future.”