BAT now eyes South Sudan, as it seeks new markets

By James Anyanzwa

British American Tobacco (BAT) Kenya is undertaking a feasibility study into the newly created independent state of South Sudan, as it mulls over expanding its export market.

Mr Gary Fagan, the company’s chief executive and area director for East and Central Africa, said BAT is negotiating with the country’s transitional government on issues to do with capacity building, and creation of proper structures such as revenue authorities in order to deal with illicit trade, which has overwhelmed the region.

tough market

"South Sudan has been a tough market to trade, because 80 per cent of the market is illicit trade. But opportunities are there for business," said Fagan.

"We are looking at it very seriously. We are talking to the transitional governments themselves. We would like to be supplying the market this year, but we are not ambitious."

Over 60 per cent of the company’s finished and semi-finished products are exported to 16 African countries. These include Ethiopia, Somalia, Egypt, Mauritius, Comoros, Tanzania, Uganda, Rwanda, Burundi, Seychelles, Democratic Republic of Congo (DRC), Malawi, Zambia, Madagascar, and the islands of Mayotte and Reunion.

Export of cigarettes

"At the moment we are talking to the parties in South Sudan," Fagan told reporters after attending the company’s 59th annual general meeting (AGM) in Nairobi, Wednesday.

Last year BAT Kenya’s pre-tax profits grew by about 30 per cent to Sh2.72 billion, prompted by increased exports of cigarettes and semi-processed leaf to Egypt.

Fagan said the BAT has additional opportunities as far as exports are concerned. Export volume rose by 33 per cent buoyed by increased supply contracts to Egypt.

"We will be obviously increasing our exports," said Fagan.