Loose Covid-19 Regulations Increase BAT Cigarette Volumes

The herald

Enacy Mapakame
ZSE-listed cigarette maker BAT Zimbabwe has seen an increase in volume performance in both export and domestic markets in the nine months ended September 30, 2021, thanks to strong demand at all levels associated with an increase in investments in its brands and the relaxation of Covid-. 19 restrictions.

In a business update, the President, Mr. Lovemore Manatsa, revealed that the company had achieved 44% growth in export volumes of leaf and cut tobacco thanks to strong demand from the export market. .

It also comes as the cigarette maker said in a financial results briefing for the six-month period ended June 30, 2021 that it plans to increase export volumes to the region, particularly after its more a large export market – Mozambique – has been hit hard by some unrest.

With this in mind, the company was investing more than one million US dollars in the development of its production capacity and its efficiency in order to meet both local and export demand.

Currently, exports represent 20 percent of the group’s total revenues. BAT exports cutrag and during the half year the Group increased its investments in its brands and a targeted investment in the go-to-market strategy, which led to a 27% growth in sales volume to 569 million sticks compared to the same period last year.

Exports of cut rags during the period increased 34% to 213 million kilograms

For the nine-month period, BAT recorded an overall volume growth of 32% compared to the same period last year, mainly due to increased consumer demand, increased exports of cut tobacco and the relaxation of Covid-19 lockdown restrictions.

The Group recognized the improvement in the economic environment as the country gradually eased foreclosure restrictions, resulting in increased economic activity and disposable income.

“The business environment for the nine months ended September 30, 2021 has shown improvement driven by the easing of lockdown restrictions on Covid-19. The economy benefited from the lower monthly inflation rate and stable foreign currency exchange rate which resulted in price stability during the period under review.

“The Company continues to assess its business model to ensure the long-term sustainability of the business and the creation of value for its shareholders,” said Mr. Manatsa.

During the period under review, the group recorded a 25 percent volume growth in cigarette sales compared to the same period last year, thanks to increased consumer demand, increased investment in brands, better market access and product availability. .

According to the group, the growth in volumes associated with the price revisions made during the period enabled BAT to record a growth in its net turnover of 38% in hyperinflationary terms, compared to the same period of l ‘last year.

Management remains optimistic that the company will continue to generate growth in shareholder value through its aligned growth strategies.

The expected economic recovery in the context of a good agricultural season, the adaptation to the limitations induced by Covid-19 and the pursuit of budgetary and monetary policy reforms should also have repercussions on the company in the long term.


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