LISTED cigarette manufacturer British American Tobacco (BAT) Zimbabwe Holdings has scrapped provisions in the company’s articles of association compelling the firm to appoint only shareholders on its board of directors.
Shareholders at the company’s annual general meeting held on Tuesday in the capital unanimously resolved to delete in its entirety article 90, dealing with the share qualification of directors.
Chairman Kennedy Mandevhani told businessdigest on the sidelines of the AGM the move was in line with international best practice and cast the net wider for selection of directors.
“You don’t want to limit the skills on the board because if someone does not have shares you cannot appoint them on the board and sometimes the shares are tightly held,” said Mandevhani.
He said the decision was not in any way informed by latest changes in the company’s shareholding after workers and other local bodies took a stake in the company under the indigenisation policy.
“No, you want to balance the skills on the board and this is a good thing,” he said.
Mandevhani also dismissed as unfounded claims the company was considering shutting down Zimbabwean operations with a view to supply the market from other regional operations.
“It is not true, we have been in this country for over 50 years and we are here for another 50 years so it’s not true, its market speculation,” he said.
Late 2013, sources indicated BAT was scaling down its operations in the country and could possibly cease manufacturing amid indications the cigarette maker could resort to outsourcing various local brands from its global network, raising fears of retrenchments.
At the time, the sources said BAT was manufacturing the Madison 30 pack in South Africa for sale in Zimbabwe, and had stopped cut rag operations for Mozambique, an indication the firm could soon be exiting the Zimbabwe market.
In a trading update, MD Lovemore Manatsa said volumes were flat year to date on last year.
“We are just down by 1%, but we are hoping that in the second half of the year, the trading would have much improved and hopefully will claw back the 1% in the second half of the year,” Manatsa said.
He said the Dunhill and Everest brands were performing above target while the leading brand in terms of volumes Madison was underperforming.
In the full year ended December 2013, Bat reported a US$3,8 million after tax profit.
Cigarettes volumes fell by 17% year-on-year due to the impact of successive excise driven price increases in 2011 and 2012.
The company announced plans to increase capital investments in 2014, key focus areas being further enhancements in manufacturing, employee health and safety and distribution capabilities.