BAT SA exit opens new opportunities for Zim firms

Nyore Madzianike-Senior Reporter

THE closure of British American Tobacco South Africa has created a potential niche in the regional tobacco value chain, presenting new growth opportunities for Zimbabwean firms that are well positioned to supply inputs, processing services and finished products to a reshaped market.

BATSA employed around 1 500 individuals and had a substantial market share primarily in Limpopo.

The company announced its intention to shut down two weeks ago, leaving gaps not only in manufacturing capacity, but also in specialised segments such as cut rag processing, blending, and contract supply — areas where Zimbabwean firms are increasingly competitive.

Commissioned by President Mnangagwa in November last year, Cut Rag Processing (CRP) is among the companies poised to seize this opportunity.

Analysts describe this multi-million cigarette manufacturing plant as an emerging giant, equipped with the technical capacity, scale and proximity to handle both domestic and regional demand.

With modern processing facilities, expertise and access to consistent tobacco supplies, CRP is anticipated to meet the needs of manufacturers seeking reliable, high-quality cut rag.

Zimbabwe remains Africa’s largest tobacco producer and has developed deep expertise across the tobacco value chain.

A prominent tobacco farmer, Mr Alfred Mutisi said: “With BATSA out of the picture, there is a clear vacuum. That vacuum does not automatically get filled by imports.

“It creates room for efficient regional players and Zimbabwe has firms that understand tobacco better than most.”

BATSA’s exit coincides with ongoing claims that smuggled cigarettes from regions including Zimbabwe contributed to its downfall.

However, market analysts argue this narrative diverts attention from the company’s internal strategic challenges and inability to adapt to evolving market dynamics.

They maintain that BATSA’s closure resulted from failing to adjust its strategy amid increased competition and changing consumer preferences.

Speaking on condition anonymity, one analyst said: “Even without illicit trade, BATSA would still have faced intense pressure.”

A former South African Revenue Services executive, Mr Van Loggerenberg, noted that BATSA had long enjoyed a monopoly, but is now contending with changing market dynamics.

“For years it held a monopoly when smoking was still cool and socially acceptable. The reality for BATSA is that it became too big, too cumbersome, and too expensive,” he said.