British American Tobacco Malaysia - BAT Malaysia Restructures Business Operations

BAT Malaysia Restructures Business Operations

Petaling Jaya, 18 March 2016 - British American Tobacco Malaysia Berhad (BAT Malaysia) announced today that it will restructure its business operations in Malaysia.

This will involve BAT Malaysia sourcing its tobacco products for the domestic market from other British American Tobacco Group factories regionally and winding down its factory operations in stages – a process that is expected to be completed by the second half of 2017.

The restructuring is in line with the Company’s efforts towards realising a new and more sustainable business model, amidst an increasingly challenging business environment. This includes high excise taxes, which have ultimately led to the sharp rise in illegal cigarette incidence and significantly lower legal sales volume, resulting in rising production costs.

Over the last five years, cigarette taxes have increased 110 percent. This encompasses four massive increases including the unprecedented increase in November 2015, which was close to 40 percent. Consequently, legal sales volume has declined significantly whilst illegal cigarettes now make up more than 40 percent of the total market.

The Company did not take the decision to wind down the factory operations lightly and has considered and exhausted many other options. In the end, the decision to wind down the factory was unavoidable.

“We take great pride in our factory and our people. This restructuring and our journey towards a transformed business model will no doubt have an impact across the organisation. Our utmost priority has always been and will continue to be, the wellbeing of our people,” said Stefano Clini, Managing Director of BAT Malaysia.

The winding down of the factory operations will affect approximately 230 employees whom will be provided a benefits package as well as the option to undergo a career-transition programme.
This restructuring and transformation is a necessary step to ensure BAT Malaysia remains a competitive consumer-focused market leader, known for its commitment not only to its consumers, but also to all its stakeholders, including shareholders, business partners, employees and local communities through sound and responsible business practices.

For more information on British American Tobacco Malaysia’s financial results, please visit www.batmalaysia.com

About British American Tobacco (Malaysia) Berhad

British American Tobacco (Malaysia) Berhad (British American Tobacco Malaysia) emerged on 3rd November 1999 from the merger of Rothmans of Pall Mall (Malaysia) Berhad and Malaysian Tobacco Company Berhad. These two long established tobacco companies brought with the merger, experience and an unrivalled portfolio of highly successful international brands to create the largest tobacco company in the country.

British American Tobacco Malaysia manufactures and markets high quality tobacco products designed to meet diverse consumer preferences. Its brand portfolio includes well-established international names like DUNHILL, KENT, PALL MALL and PETER STUYVESANT. British American Tobacco Malaysia has about 1,000 employees who are involved in the full spectrum of the tobacco industry, from processing to manufacturing, and marketing to distribution.

British American Tobacco Malaysia is part of the British American Tobacco group, which is the world’s most international tobacco group and the second largest stock market listed tobacco group by global market share.