Govt pushes for  10bn cigarette sticks
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BAT Zimbabwe is already making plans to ramp up capacity

Business Editor
Government is pushing for an increase in cigarette manufacturing capability to 10 billion sticks from the current two billion, as part of efforts to increase beneficiation.
Industry and Commerce Minister Mike Bimha told The Herald Business, Cabinet had recommended the drive to increase cigarette manufacturing in the country as part of efforts to unlock value in the tobacco sector.

He said the Government would create an enabling environment to encourage existing cigarette manufacturers to increase capacity.

The country’s largest cigarette manufacturer BAT Zimbabwe is already making plans to ramp up capacity.

The group’s volumes in the six months to June were at 636 million sticks. Management told analysts last month that to better the performance, the group will increase the rate of capital investment in the second half and complete projects in manufacturing,

Minister Bimha said Cabinet had raised a number of concerns around the tobacco sector including smuggling and espionage and also touched on the whole value chain.

“While the Cabinet acknowledged the role played by contractors in uplifting tobacco farmers, value addition is currently limited as most tobacco is sold as unprocessed,” said Minister Bimha.

“In the past value addition was confined to one company. However, at the moment the tobacco industry is now competitive. It’s dog eat dog.”

“Cabinet had made four recommendations. Firstly to have a clear policy on the medium term strategy to increase beneficiation of tobacco in consultations with stakeholders in the sector.

“The second has to do with increasing manufacturing capacity. The third and fourth recommendations are to engage other countries buying tobacco from us and more importantly to engage South Africa and have bilateral discussions with them as they are the major trading partner.”

Minister Bimha said Government would resuscitate a technical committee which would also look into the Zimbabwe-SA trade agreement.

Overall, the whole purpose is to ensure that Zimbabwe accrues more benefits from its improved annual output.

Minister Bimha said Government was encouraged by the convergence in the private sector on the economic blue print Zim Asset. “Zim Asset is a private sector driven programme because Government by its nature does not get into beneficiation and value addition but rather creates an enabling environment.”

He said Government will continue to engage the private sector in terms of implementation of beneficiation and value addition strategies.

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