BAT opens Sh152m warehouse with eye on exports growth

Cigarette maker British American Tobacco (BAT) has opened a Sh152 million warehouse expected to increase its storage capacity for exports.

Managing director Keith Gretton said the Cut Rag Tobacco Store would create additional space to increase storage capacity by 300 million kilogrammes, an equivalent of 280 40-foot containers of semi-processed tobacco.

“We export 70 per cent of our manufactured products to 16 foreign countries within East and Central Africa region and we want to become the supplier of choice and an exporting hub,” said Mr Gretton during the opening of the facility at BAT headquarters in Nairobi on Wednesday.

Kenya is the manufacturing hub for BAT. The export business has helped BAT to weather stiff anti-tobacco legislation and steep taxation.

Recently, passed tobacco regulations require the printing of pictures on the cigarette packets “in full colour with a favourable background that maximises noticeability and legibility of the health warnings”.

The rules also ban aertising, promoting and sponsorship of tobacco and its products as well as smoking in open spaces to protect the public from the harmful effects of tobacco smoke.

Mr Gretton, however, said such regulations should be “consistent” with the Constitution, principles of better regulation, transparent and accountable.

“We believe that the manufacture, distribution and sale of tobacco products should be regulated. To this end, we support balanced, evidence-based and workable regulation that measurably reduces the public health impacts of tobacco products,” he said.

In July, the cigarette maker moved to court to contest the regulations and the Health ministry’s failure to release the required technical information to enable them implement the law.

READ: Health minister defends strict tobacco rules in battle with manufacturer

Industrialisation Cabinet secretary Adan Mohamed, who officiated at the launch, said BAT has contributed significantly to the economy through jobs creation.

According to official data, BAT has contracted more than 5,000 farmers to cultivate tobacco. The company paid out Sh1.3 billion to the growers in the last crop harvest.

Mr Mohamed, however, said the regulations were a reality in any sector, terming the Kenyan environment as conducive for the industry’s growth.
He also said the government would increase the level of surveillance in war on counterfeits to boost the private sector.

“We want such businesses to continue to grow exports because when they win, we win as a country in terms of revenue. Last year, BAT remitted over Sh15.4 billion in government levies and if they contribute this much in the economy it is only important that we listen when they call,” he said.

“We are training over 100 police officers to specifically tackle the issues of counterfeits and promote local business.”