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Cape Town - British American Tobacco has announced its South African subsidiary is entering the final phase of a R1bn expansion project to enhance sales, marketing and distribution operations.
The project, which started in 2011, has seen significant infrastructure investment across South Africa and the creation of approximately 800 new jobs in Gauteng, Kwa-Zulu Natal and the Western Cape.
Kingsley Wheaton, the group corporate and regulatory affairs director for British American Tobacco, who is visiting South Africa this week, said: “This investment is a clear illustration of our confidence in South Africa and our commitment to this important market.
"South Africa already houses one of our strategic factories in Heidelberg, Gauteng, and this investment project will complement that by adding new trade marketing and distribution capabilities.”
The investment was made in South Africa despite the tobacco industry facing an increasing number of challenges, including rising levels of tobacco trafficking and an increasingly uncertain regulatory environment.
Wheaton said: “While we're excited about our South African operations we are equally concerned at the alarmingly high incidence of tobacco trafficking in the country.
"Unless it's addressed, the illegal tobacco trade has the potential to undermine, not only the infrastructure and human resource investments made by legitimate companies such as ours, but the government's own agenda to regulate tobacco, given tobacco traffickers rarely comply with the laws of the land.”
Globally the illegal tobacco industry accounts for around 6 -12% of consumption.
However, according to independent research, the illegal tobacco problem in South Africa, which is predominantly where duty has not been paid, has more than doubled in the last four years to approximately 30% of total cigarette consumption in the country.
This worrying escalation in the illicit economy has seen both industry and government strengthen collaborative efforts to address this scourge.
Wheaton continued: “We engage with a number of stakeholders including the government, through the Tobacco Institute of Southern Africa, to curb the problem.
"The collaborative efforts of this group, to date, have demonstrated what can be done when the public and private sectors work together to achieve common goals.
“We believe it is critical for the tobacco industry and the government to increase this collaboration if we are to find solutions which ensure an environment where law-abiding companies can continue to thrive and contribute to the broader South African economy.
"It's also encouraging that the minister of health has signed the World Health Organisation’s global protocol to eliminate illicit trade in tobacco.”
In 2012 alone, law enforcement authorities seized over 1 billion illicit cigarettes, destroyed around 80 million of these and arrested more than 1 300 arrests.
The project, which started in 2011, has seen significant infrastructure investment across South Africa and the creation of approximately 800 new jobs in Gauteng, Kwa-Zulu Natal and the Western Cape.
Kingsley Wheaton, the group corporate and regulatory affairs director for British American Tobacco, who is visiting South Africa this week, said: “This investment is a clear illustration of our confidence in South Africa and our commitment to this important market.
"South Africa already houses one of our strategic factories in Heidelberg, Gauteng, and this investment project will complement that by adding new trade marketing and distribution capabilities.”
The investment was made in South Africa despite the tobacco industry facing an increasing number of challenges, including rising levels of tobacco trafficking and an increasingly uncertain regulatory environment.
Wheaton said: “While we're excited about our South African operations we are equally concerned at the alarmingly high incidence of tobacco trafficking in the country.
"Unless it's addressed, the illegal tobacco trade has the potential to undermine, not only the infrastructure and human resource investments made by legitimate companies such as ours, but the government's own agenda to regulate tobacco, given tobacco traffickers rarely comply with the laws of the land.”
Globally the illegal tobacco industry accounts for around 6 -12% of consumption.
However, according to independent research, the illegal tobacco problem in South Africa, which is predominantly where duty has not been paid, has more than doubled in the last four years to approximately 30% of total cigarette consumption in the country.
This worrying escalation in the illicit economy has seen both industry and government strengthen collaborative efforts to address this scourge.
Wheaton continued: “We engage with a number of stakeholders including the government, through the Tobacco Institute of Southern Africa, to curb the problem.
"The collaborative efforts of this group, to date, have demonstrated what can be done when the public and private sectors work together to achieve common goals.
“We believe it is critical for the tobacco industry and the government to increase this collaboration if we are to find solutions which ensure an environment where law-abiding companies can continue to thrive and contribute to the broader South African economy.
"It's also encouraging that the minister of health has signed the World Health Organisation’s global protocol to eliminate illicit trade in tobacco.”
In 2012 alone, law enforcement authorities seized over 1 billion illicit cigarettes, destroyed around 80 million of these and arrested more than 1 300 arrests.
