Zambia attracts production

British American Tobacco Zambia (BATZ) is seeking shareholder approval to acquire a US$15 million revolving loan facility from BATIF Dollar Limited to finance the construction of a cigarette manufacturing plant in Zambia, according to a times of Zambia story relayed by the TMA.

BATZ, which has been sourcing 95 percent of its cigarettes from BAT Kenya and the remainder from BAT South Africa, believes that the current excise tax regime favors domestic manufacturers over importers.

In a filing with the Lusaka Securities Exchange, BATZ said the board was considering launching local production in the country, ‘which would not only reduce the tax burden and bring about a fundamental change in the long term financial position of the company but in addition create employment for the locals’.

On Monday, the Zambia Daily Mail reported that the Zambia Association of Manufacturers (ZAM) had welcomed a rise in duties on unmanufactured tobacco and tobacco refuse.

The association was quoted as having said that the increase, from 15 percent to 25 percent, would encourage value addition to the commodity and support farmers.

ZAM’s CEO Chipego Zulu commended the government for encouraging the processing of tobacco locally as a move that would benefit tobacco farmers.

She said the move would encourage also the production of cigarettes and boost the manufacturing industry.