Source: BAT Zimbabwe implements defensive strategy to protect market share – herald
Business Reporter
BAT Zimbabwe is implementing a defensive strategy anchored in product portfolio optimisation and operational discipline to protect its market position against growing competition.
Managing director Ms Rumbidzai Hondora told an annual general meeting last Thursday that the country’s largest cigarette maker was prioritising capital allocation towards its core brands to sustain consumer loyalty and ensure its product mix remains responsive to shifting market demand.
According to Ms Hondora, BAT maintains a market share of approximately 75 percent, although some industry analysts estimate a lower figure due to the significant impact of new market entrants.
In January of this year, Cut Rag Processors (CRP) launched its US$102 million integrated tobacco processing facility.
The plant can process three million kilogrammes of cut rag for export monthly and produce 60 000 cigarette master cases.
In 2024, the Swan Valley Group launched its cigarette brands, which are already available on the market.
Ms Hondora said central to this strategy is the optimisation of “route-to-consumer” logistics, with the firm emphasising that shelf availability is the primary determinant of market share retention.
Furthermore, BAT is pursuing a rigorous cost-rationalisation programme to drive manufacturing efficiencies and mitigate the impact of rising overheads. By lowering its cost-per-unit, the company seeks to maintain price competitiveness and address the affordability constraints currently impacting consumer disposable income. The approach, supported by a focus on sustainable talent management, aims to consolidate BAT’s domestic earnings base and ensure long-term fiscal resilience.“So really, it’s about focusing on what is within our control, and what is within our control is investing in our brands, which is our product portfolio, making sure that it remains relevant,” said Ms Hondora.
“Because once you do that, then you’re one step closer to ensuring that your consumers vote for your brand.
“The second one is about the route (to the consumer. This is critical: if your product isn’t on the shelf, you can’t win.
“The third one is around cost optimisation. Because once you are able to manage your costs better and drive efficiencies, your manufacturing costs can be lower, and you can also play the price game competitively to address the pressures that the consumers have from affordability.”
Ms Hondora also said the company will maintain its focus on exports to generate foreign currency.
However, the primary challenge in some of the markets is securing access to foreign currency to pay within the 90-day acquittal period. Ms Hondora said BAT was not shutting down its operations across sub-Saharan Africa, but is instead in a restructuring process.
This involves evaluating individual end-market dynamics; if operating conditions in a specific market are no longer commercially viable, the company takes appropriate action. For instance, BAT South Africa explicitly noted that the illicit cigarette trade now accounts for 75 percent of total consumption.
Consequently, legal manufacturing was no longer viable, prompting their recent decision. Nevertheless, she emphasised that BAT has not exited South Africa, and its brands remain fully present in the market.
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