[Intl-tobacco] BAT Rwanda Now Cedes Cigarette Making to Kenya

[robert weissman]

BAT Rwanda Now Cedes Cigarette Making to Kenya
East African Business Week
(Kampala)

April 10, 2006
Posted to the web April 11, 2006

Edris Kisambira
Kigali

British American Tobacco Rwanda, previously known as Tabarwanda,
announced an
operational restructuring last week, in which the company has become a
centre of
distribution and marketing excellence for the Rwanda-Burundi area.

Mr. Luc Badibanga, the managing director, said BAT Rwanda has been
identified by the
British American Tobacco (BAT) Group for its position and added that the
country was
"strategic for the long-term continuity of our business in the area."

"Our unique geographical position makes the country an ideal hub for the
expansion
of the Group's distribution network. Rwanda has been identified as a
launch pad into
Burundi," he said.

During a press conference at Intercontinental Hotel Kigali, Badibanga
added that the
restructuring would also enlarge the company's portfolio with the
introduction of
renowned international brands starting this year.

As part of this change, BAT Rwanda will transfer cigarette production to
the sister
company BAT Kenya from Quarter 2, 2006: "BAT Kenya has been identified as
a centre
of excellence for manufacturing," Badibanga added. The move, he said, will
allow the
organisation to optimise resources in distribution and marketing.

The BAT Group embarked on a restructuring exercise of its operations late
last year
when it set in motion a restructuring exercise (due to be completed this
April) of
its operations that should see Uganda become one of its five key tobacco
leaf
sources alongside Brazil, Zimbabwe, India and Indonesia.

Those changes have resulted into British American Tobacco Uganda (BATU)
ceding
manufacturing of cigarettes to British American Tobacco Kenya.

Badibanga also mentioned that the company would maintain its position as
one of the
leading taxpayers in Rwanda.

The company early this month disclosed that it had remitted Frw 2.6billion
in taxes
to the government in 2005, which constitutes 51% of its turnover.

"Our contribution to government revenues through excise tax payment would
even
increase on adoption of the specific excise regime as opposed to the
current Ad
Valorem system," Badibanga said.

The business model is now aligned to the integration of British American
Tobacco
into an East African Business Unit, at a time when Rwanda and Burundi are
joining
the East African Community (EAC). This move means both Uganda and Rwanda
will give
up manufacturing of cigarettes to the Kenyan company and concentrate
instead on leaf
growing, processing, tobacco exports and marketing and distribution of
cigarettes
respectively.

Mr. Belai Tzeggai, the BAT Rwanda marketing manager, emphasized that the
quality of
products from Nairobi would be the same or even enhanced by harmonising
quality
across the region through centres of excellence.

"We will continue to satisfy customer expectations by providing high quality
products to our consumers. We have every assurance that at no point will
there be an
interruption in our supply chain," he said.

In the process, some employees at the Kigali factory will become redundant
while
some will be redeployed into other arms of the business.

"In line with BAT employment principles, the company will go beyond the
legal
requirements to minimise the impact on affected employees - including
training in
micro finance project management," Badibanga said.

BAT has been present in Rwanda for over 30 years through her predecessor
Tabarwanda,
and has grown into a prominent corporate citizen through various social
programmes
and sponsorships. BAT Rwanda has partnered with the government on
initiatives like
the Jua Kali exhibitions, which will be hosted in Kigali for the first
time in a
foreseeable future.

Badibanga pledged that the BAT Group would also continue its partnership
with the
Government of Rwanda in the Mountain Gorilla Conservation programme.

"BAT Rwanda is and will remain firmly rooted in Rwanda and we are here to
stay,"
Badibanga said.

British American Tobacco Rwanda is part of the British American Tobacco
Group.
British American Tobacco is the world's most international tobacco company,
operating in 180 countries worldwide with over 90,000 employees.

BAT acquired control of Tabarwanda in September 2001, through a
privatisation plan
with the government of Rwanda.

The Company's manufacturing operation is currently located in Kigali and
produces
Virginia and oriental type of cigarettes for the Rwandan market.

The Company's brand portfolio includes Embassy and Sweet Menthol, which
are both
regional brands, and Impala and Intore, which are local brands.

British American Tobacco Rwanda has a market share of approximately 83%
and employs
over 4000 people.

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