On a Date with British American Tobacco (BAT)

•

+650 million USD worth of tobacco sold in 2022. I am working to improve the sector by empowering farmers Welcome to On a Date with a listed company on the Zimbabwe Stock Exchange (ZSE) THREAD: On a Date with British American Tobacco Zimbabwe (Holdings) (BAT)

History, 1856, An American industrialist Washington Duke's wife Artelia Roney gives birth to his second son James Buchanan Duke popularly known as "Buck". Buck and brother Benjamin join their father's business. and quickly establish their success in tobacco.

1885, The company acquires a licence to use the first automated cigarette making machine which gave them a competitive advantage 1890, Adoption of new technologies helps Buck's business to gain 40% of the American Cigarette market. He uses this as leverage

Using his leverage he forces the consolidation of major producers into a single corporate entity, American Tobacco Company (ATC) It became a monopoly controlling 90% of the American cigarette market. He became ambitious casting his eyes on the British market

1901, The fragmented cigarette producers of Britain are forced to combine their businesses to form Imperial Tobacco Company (ITC) ITC start pushing their cigarettes in the American market forcing ATC to consider a trade settlement to survive the onslaught.

1902, ITC and ATC form a joint venture (JV) company, British American Tobacco (BAT). BAT parent businesses agreed to restrict their operations to their domestic territories Britain and America. Export businesses and overseas units were to be run by BAT.

1904, BAT acquires tobacco producers in South African. These businesses had operations in Zimbabwe, Zambia and Malawi. The business became known as United Tobacco Company which later formed a localized unit in Zimbabwe. The unit is listed in 1959 on ZSE

1911, Prior to setting formal operations in Zimbabwe ATC had sold off its ownership of BAT to ITC due to Sherman's antitrust laws in USA. These laws broke up ATC resulting in RJ Reynolds, ATC, Lorillard and Liggert &Myers. 1980, ITC divest from BAT plc

1999, BAT plc merge with Rothmans International which resulted in the rationalisation of their operations in Zimbabwe The merged business became BAT Zimbabwe (Holdings) Limited (BATZ Holdings) 2000, Cut Rag Processors purchases the excess equipment from BATZ

#2. Operations, BATZ is a manufacturer and distributor of CIGARETTES through a network of +6,600 independent retailers and wholesalers It exports CUT RAG which is threshed or semi processed flue cured tobacco which contributes significantly to its revenue.

It has a cigarette manufacturing plant in Harare and trade depots across Zimbabwe BATZ has a strong portfolio of brands which is balanced according to consumer tastes and pricing Dunhill is in premium segment. Madison Lucky Strike & Rothmans caters for value

#3. Competitors, BATZ is the largest producer & distributor of cigarettes across Zimbabwe. However its market share has been ⬇️ due to, Pacific Cigarette Company Formerly Savanna Tobacco an indigenous business which produces, • Pegasus • Branson

Roxbury Cigarettes The company produces the Roxbury and Chelsea brand of cigarettes. Gold Leaf Tobacco It is a South African based cigarette manufacturer which holds the right to market the Rudland & George (RG)

#4. Share price, 2800 ZWL per share as at December 16, 2022 3201 ZWL per share on the 3rd of January 2022 38th on ranking in terms of year to date performance on the ZSE 44th most traded stock over the past 3 months to 16/12/2022. 20,633,517 issued shares

#5. Shareholding, 42,98% of BATZ is owned by its parent BAT plc through its investment vehicle BAT International Holdings (UK). BATZ being a foreign owned company transferred 20.76% of its shares to an ESOT and TET to fulfill the indigenization laws.

#6. Management, Sivenasen Moodley - MD since March 2022. √ MBA from Stellenbosch Business School. √ Honors Degree in Marketing from UCT Formerly an Account Director at Unilever South Africa where he spent 12 years. Joined BAT in August 2018.

#7. Pitch, BATZ's shareholders are mainly pension funds which is a testament of the confidence in the entity. Its shares are closely held since they are few though it makes up about 3% of the ZSE market capitalization. ⬆️ Market share for its cigarettes

Each week will be on a Date with a company listed on the ZSE The purpose of this thread is to have a minimum appreciation of listed firms. Disclaimer: Do not misconstrue this thread as investment advise DATE companies before you buy its shares.