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BAT Results not That Smoking

DOMESTIC cigarette sales volumes rose by 18% in the first half of the year compared to last year, BAT chairman Kennedy Mandivheni said.

He attributed the increase to a stable currency and improvement on the economic front that has also improved disposable incomes.
Mandivheni said: “This is attributed primarily to the stable currency and improving   economic environment which in turn results in increased disposable income and demand for consumer goods.”
But cut rag shipments to Mozambique were 31% lower in the same period owing to reduced demand.
He added: “Cut rag shipments to Mozambique finished the first half of the year 31% lower than the same period in 2008, mainly because of reduced demand during the first half of the year. However, this is expected to recover by year end.”
The group’s operating profit stood at US$223 000 while turnover was US$5,3 million.
BAT says sales prices have been held at lower levels than obtaining in the region.
Mandivheni hopes cost-containment measures introduced by the group will ensure that business continues to increase sales volumes.
Managing Director Lovemore Manatsa says the group’s Madison brand of cigarettes remained a favourate among smokers and has the bulk of total market share.
He said: “Within our brand portfolio, Madison remained the brand with the highest market-share in the total Zimbabwe cigarette market.”
Savanna Tobacco, BAT’s major rival on the market also claims it has 60% of the market with its toasted brand—Pacific Storm. Savanna Tobacco sold half a billion cigarettes sticks in Zimbabwe and other markets in the first quarter of this year.  
BAT on the other hand did not reveal how many cigarettes it sold. Instead the group gave a percentage increase.
Savanna says it is enjoying a near majority share of the market for long dominated by BAT. Savanna Tobacco was founded recently. The company owns the Pacific Storm, Mist, Breeze and Blue brands. But the company’s Pacific Storm has been widely accepted by formerly BAT loyal customers. BAT’s Newbury, Berkeley, Everest, Madison and Kingsgate also command respect on the market.
BAT believes the last half of the year will be more stable as further economic recovery takes place.


Chris Muronzi

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