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BATU cedes leaf operations to new tobacco company
A tobacco farmer picks leaves. BATU, which has been in the leaf growing business for years, has given up the venture.
What you need to know:
Uganda exports fish fillet, coffee, tobacco, among others.
Kampala
British American Tobacco Uganda (BATU) will stop growing tobacco leaf in Uganda by close of the year, the company has announced.
In a Saturday message to its shareholders and the public, the tobacco company said: “The Board of Directors has considered and approved a proposal to discontinue its leaf growing and export business in Uganda.”
The development means that thousands of farmers who are contracted by BATU across the tobacco growing regions in the country will have to renegotiate a fresh deal with Alliance One International, the new company that is taking over the leaf growing operations from BATU or else supply another tobacco company with the cash crop.
However, according to a press statement it issued on Saturday, BATU expects that the farmers will be taken on board.
The statement also quoted managing director Jonathan D’Souza as saying the company’s (BATU) operations, specifically cigarettes business, will continue to be operated in the country.
Mr D’Souza also said Alliance One is well positioned to expand the growth of the crop further. He said: “The move will be good for the farmers in Uganda as BAT Uganda will continue to operate in Uganda, focusing on its cigarette business.”
In another public notice issued by the company top management, Alliance One International will take over growing of tobacco leaf in Uganda and exporting it as well.
“This follows a decision by the company’s main leaf customer, British American Tobacco Global Leaf Pool, to start buying Ugandan tobacco from Alliance One International,” BATU corporate and regulatory affairs manager Diana Apio-Kasyate said when contacted over the weekend.
Meanwhile, industry analysts like Makerere University Prof Augustus Nuwagaba said the impact of the transfer of one of BAT Uganda’s line of operation is too early to tell, given that such decisions are normally prudently done after weighing several options.
