BRITISH AMERICAN TOBACCO
BRITISH AMERICAN TOBACCO SA
BAT Steps Up
Diversification PRODUCTION: Manelesi Dumasi
British American Tobacco SA continues to innovate and adapt to changing market conditions so that it can always thrive, even after a century of activity in one of its most important global markets. With new product categories stirring new demand, and awards for HR excellence, this is a business fulfilling its burning ambition in Africa. 2 / www.enterprise-africa.net
© BAT SA
INDUSTRY FOCUS: AGRICULTURE
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As the second largest company listed on the JSE by market cap, the largest tobacco producer in SA by market share, and a company with more than a century behind it, British American Tobacco SA (BAT SA) certainly has a lot to live up to. Its almost 2000 employees are part of an international group that sells products across almost every country on earth. As custodian of some of the world’s most popular cigarette brands, British American Tobacco plays a vital role in agriculture, production, distribution, science and research, marketing, and sales, and is a leader in international tobacco trade. Today, the World Health Organisation suggests that 1.1 billion people around the world smoke – around 20% of global population. But, since 2000, there has been a gradual decline in the number of smokers around the world, with many nations introducing warning advertisements
// BRITISH AMERICAN TOBACCO HAS ALWAYS BEEN A COMPANY FOCUSED ON ATTRACTING AND RETAINING THE BEST TALENT, NOT ONLY OFFERING EXCELLENT CONDITIONS, AND A DIVERSE CULTURE AND WORKING ENVIRONMENT, BUT ALSO ENSURING EXCITING CAREER OPPORTUNITIES IN THEIR WORLDWIDE LOCATIONS // 4 / www.enterprise-africa.net
on packaging and banning smoking in public places. From 2000 to 2015, 29 million people quit. The number of fatalities associated with smoking is still high, with seven million people dying each year globally. Many nations have signed up to global and regional targets to cut tobacco use in over 15s by 30% by 2025. With that date fast approaching, for companies like British American Tobacco, the market is constantly changing, and there are many hurdles which must be overcome in order to remain relevant and to deliver for a market that is different one day from the next. Vaping and smoking alternatives have taken rise in the market and BAT has extended its reach into this market, but following several high-profile health related stories emanating from around the world, the future of vaping is now also unclear. For BAT SA, the company continues to do all it can to position itself as a reliable, trustworthy and responsible corporate citizen. VAPE In August, the South African competition commission approved the acquisition of leading vaping products company, Twisp, by BAT SA. Twisp has around 70 stores nationally and is recognised as the largest multi-channel distributor of vape products and flavours in SA. The hope is that BAT can introduce Twisp’s range of risk reducing products across its wider international network. “Twisp in South Africa brilliantly complements our well-developed existing New Category retail footprint in Poland, the UK and Germany. This footprint is of strategic importance to our future; allowing us to develop direct-toconsumer relationships, gain substantial consumer insight and the ability to fast pilot and test new product lines from our New Category brands. “Consistency in this retail footprint will be critical for consumer navigation, and the roll out of a homogeneous
// CONSISTENCY IN THIS RETAIL FOOTPRINT WILL BE CRITICAL FOR CONSUMER NAVIGATION, AND THE ROLL OUT OF AN HOMOGENEOUS RETAIL BRANDED PROPOSITION HAS ALREADY COMMENCED IN EUROPE // retail branded proposition has already commenced in Europe,” said Kingsley Wheaton, Chief Marketing Officer, British American Tobacco. In November, the company announced that it would widen its product portfolio and invest into new categories by looking closer at vaping, marketing through partnerships with global leaders such as McLaren Racing. New categories include: VUSE for vapour products; VELO for modern oral products and glo for tobacco heating products. Since 2013, the company has invested $4 billion in product development, particularly surrounding reduced risk potential products. “We understand global brands are important for our worldwide consumers - brands that they can trust, recognise and buy wherever they are in the world. We want to lead the industry across all our New Category products and believe the time is now right to simplify our brand portfolio, creating three strong, recognisable and trusted global brands. For these new consumer categories, both quality and trust are vital and this step further supports BAT’s leading ambition in the industry,” said Wheaton.
BRITISH AMERICAN TOBACCO SA
“We are at a very exciting stage of our New Category journey. Central to our leading role is continuing to develop remarkable products and trusted brands, whilst driving global awareness of them. The move to VUSE, VELO and glo is yet another exciting milestone in our New Category journey. We remain committed to accelerating the transformation of our industry and the growth of our brands. “I am delighted that we’re celebrating the upcoming launch of our new global vapour brand, VUSE, in the UAE this weekend. Our fantastic partnership with McLaren continues to provide us with a truly global platform with which to accelerate our ambition with our New Categories business, which is focused on creating a better tomorrow for our consumers, shareholders, society and employees.” Following media reports of tragedies in the USA and Europe, where vaping products had been associated with deaths and serious lung issues, BAT was at the forefront of those calling out for improved, increased and scientifically backed regulation to ensure consumer safety. “As the world’s second largest vapour company, providing high quality products to more than 9 million consumers worldwide, we take consumer safety very seriously. Quality and safety testing are a crucial part of the way we develop and manufacture our products and we scrutinise the ingredients we use in them,” said Dr David O’Reilly, Director of Scientific Research at BAT in September. “We are fully supportive of the efforts of the various government agencies in the US, Canada and around the world who are working to understand the exact cause of the recent tragic consumer cases. To the best of our knowledge, no product developed or manufactured by BAT has been involved in these cases. “However, these cases clearly demonstrate the need for robust and
effective regulation which ensures high product standards, particularly with regard to the testing and reporting of the ingredients used in vaping liquids. “Governments also need to ensure relevant authorities enforce manufacturer compliance with these regulations. Only through effective regulation and enforcement will consumers retain confidence in vaping products which could potentially reduce the public health burden related to smoking. “Given the significant investment and scientific resources we deploy to the testing and stewardship of our own products, we stand ready to work with governments and the science community to help in any way we can to support the development of robust product standards.”
This drive further enforces the need, globally, for elimination of the illicit tobacco trade – something which remains rife in South Africa, with a large health and financial cost to everyone in the country. R30M AGAINST ILLICIT TRADE Earlier this year, BAT SA received a R30 million tax rebate from SARS after paying R9.1 billion in 2018. Head of External Affairs, Johnny Moloto said that the company would use the entire rebate to continue its fight against illegal tobacco trading. “South Africans continue to be ripped off by connected billionaires who are taking at least R20 million every single day out of their pockets. These criminals are the enemies of the State and of the people,” he said. “#TakeBacktheTax has shone a
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INDUSTRY FOCUS: AGRICULTURE
© BAT SA
light on the illegal activities of these criminal billionaires who are robbing South Africans and we are proud to continue supporting it. “We are highly encouraged by the actions that have been taken by the new SARS leadership in cracking down on this illegal trade after years of deliberate neglect. “BAT SA was not a beneficiary of this corruption by rogue SARS agents. It, like all other taxpayers in South Africa, was a target. We are
the only local tobacco manufacturer in the country that declares all our production and pays all our taxes. “We are very confident than any analysis of our operations and the volumes of documentary evidence we have supplied to SARS by any auditor with the appropriate experience in Customs & Excise will conclude that we are utterly compliant, fully paid up and due the rebate that will be used to continue to fight the illegal trade,” added Moloto.
SMOKING HOT PEOPLE For BAT’s people, the brand continues to lead the way in an industry which requires constant attention, and all work that they put in is well-rewarded. The company contributed 0.52% of SA GDP in 2015 and labelled itself a ‘bedrock of South African agriculture’. Beyond its direct employee base, the company is responsible for a much larger number of jobs, and its focus on successful HR practice was rewarded after the Top Employers Institute recognised the
// GIVEN THE SIGNIFICANT INVESTMENT AND SCIENTIFIC RESOURCES WE DEPLOY TO THE TESTING AND STEWARDSHIP OF OUR OWN PRODUCTS, WE STAND READY TO WORK WITH GOVERNMENTS AND THE SCIENCE COMMUNITY TO HELP IN ANY WAY WE CAN TO SUPPORT THE DEVELOPMENT OF ROBUST PRODUCT STANDARDS // 6 / www.enterprise-africa.net
BRITISH AMERICAN TOBACCO SA
© BAT SA
business as a Top Employer 2019 for South Africa, Africa and globally. Giovanni Giordano, BAT’s Group HR Director, said: “Being named as a Global Top Employer is a great honour. At BAT, we believe that people and their talent are essential to our success – and this accreditation acknowledges our focus on developing our people, and on providing an engaging, innovative and diverse place to work. “As we work to transform our business and the industry, our culture of inclusion, performance and recognition is now more important than ever. It has never been so exciting to work at BAT, and we are delighted that our ongoing commitment to our 55,000 people, and the work that we do, has been recognised in this way.” David Plink, CEO of the Top Employers Institute, said: “British American
Tobacco belongs to a very exclusive global community of Top Employers and it’s continuously showing great achievements. The recognition of BAT’s solid performance has expanded from Europe - where they are certified for the eighth consecutive year - to Africa, Asia Pacific, and Middle East. BAT is also the first tobacco company to be recognised as a Top Employer in Latin America. “These outstanding results have earned British American Tobacco the exclusive Top Employer Global recognition. British American Tobacco has always been a company focused on attracting and retaining the best talent, not only offering excellent conditions, and a diverse culture and working environment, but also ensuring exciting career opportunities in their worldwide locations.” Top Employers Institute research
showed that BAT SA provides exceptional employee conditions, nurtures and develops talent throughout all levels of the organisation and has demonstrated its leadership status in the HR environment, always striving to optimise its employment practices and to develop its employees. For BAT SA, and the wider BAT group, having the best people is the base for a far reaching and impactful business. It is a job creator, a product innovator, an agricultural protector, an economic driver, and a stopper of illicit tobacco trading. In a quickly changing market, BAT SA is displaying all the tendencies needed to thrive in these uncertain times.
WWW.BAT.COM
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December 2019
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