British American Tobacco South Africa (BATSA) will shut down its only cigarette manufacturing plant and stop domestic production by the end of 2026, citing the severe impact of the rapidly expanding illicit cigarette market, the company said on Thursday, according to Reuters. The planned closure puts about 230 jobs at risk.
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The factory, located in Heidelberg in South Africa’s Gauteng province, currently operates at only 35% of its total capacity.
BATSA said the sharp decline in production volumes is directly linked to the exponential growth of illicit tobacco trading in the country.
BATSA, which produces well-known cigarette brands including Dunhill and Peter Stuyvesant, is a unit of British American Tobacco.
“With approximately 75% of the South African cigarette market now estimated to be illicit, continued local manufacturing has become unviable,” said Johnny Moloto, Head of Corporate and Regulatory Affairs at BAT Sub-Saharan Africa.
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Image Credit: The Citizen
