Slide 10
Now, we will look at one of the promising earning sectors of BAT Bangladesh, which is leaf
export. Though they started exporting in 2010, it recently got a boost after introducing the Savar
manufacturing plant. In 2021, Almost 4% of the Net Revenue was from leaf exports, which tells
us how significant it is becoming to BAT.
While the graph shows a fluctuating trend, we learned from our interviews that it was supposed to
grow upward after 2019, but COVID-19 restricted its full export potential, something that recently
gained its pace back.
Slide 11
Additionally, countries like China are the major export destinations for the leaf, which has a
massive market for tobacco products. We have also learned from our interview that BAT
Bangladesh has one of the largest leaf operation functions in the whole BAT community because
of the climate and ecological condition of our country that suits the production of tobacco leaves,
making it one of the important considerations for investors who are interested in the company.
Slide 12
As we look into the Board of director members, they all have expertise in different fields. The
Board consists of 14 members, including 5 foreign members. This is because of BAT’s promise to
sustain a transparent corporate culture and stick to the roots of its organizational strategies.
Slide 13
Each of the members has different accolades associated with their names and expertise in offering
their services in different positions in various headquarters of BAT.
Slide 14
Additionally, there are 9 people who can be considered as the top management, comprising of
people like Mr Shehzad Munim, the MD; Mr Numayer Alam, the head of trades and planning etc.
All of them have solid work experiences and personal achievements without being involved in any
controversial situations, making BAT’s management structure one of the strongest ones in the
entire country.
Slide 15
Now if we look into the company's shareholding pattern, almost 73% of the shares are owned by
the parent/subsidiary or associate companies of BAT. It is followed by general shareholders,
owning 17.6% of the shares of BAT. The majority of these shareholders have less than 501 shares.
It is followed by the investment corporation of Bangladesh, Shadharan Bima Corporation, the
president of Bangladesh himself and Bangladesh Development Bank ltd.
Slide 16
Considering the competitive landscape, this is a 2019 landscape where BAT had 62% of the market
share, followed by JTI. From our interviews, we tried to get the current number which they
mentioned is around 80% and from a website named Tobacco Tactics, we saw that it was more
than 84%, aligning with our findings from the interview. JTI’s market share has dropped below
10%, which we have also heard because of BAT’s market-capturing strategies.
Slide 17
Now we would look into some of the trends an investor should consider before investing in a
company like BAT. First of all, our government is going to increase the turnover tax rate to 3%
for these products which will increase the product prices. And as the historical figures showed,
which my teammate Fabiha also mentioned, an increment in prices leads to a decrease in the
products’ sales, particularly in the low segment. While even in such scenarios, BATB tries to keep
the price as low as possible, the government gives a ceiling on the lowest price so they cannot go
beyond that.
Slide 18
Next, we are seeing the Camel brand of JTI seeking interest over time for the past couple of years
where BAT’s low segment, the MVP is currently operating. We asked in our interview, whether
or not BAT considers this as a significant threat to their business. They’ve replied that, while there
are some shifts in the consumer demography after the COVID-19 pandemic, which is leading
people to choose the cheapest option, the change is not that significant enough for them to be
worried about, at least now.
Slide 19
Additionally, our government is likely to ban e-cigarettes and strictly penalize the usage and
trading of such products, which is why the sales of regular cigarettes are predicted to increase. The
amount of growth however, was difficult for us to determine.
Slide 20
There are symptoms of global tobacco tax increasing, in countries like the U.K., Pakistan,
Indonesia etc. What happens is when duty or tax in these countries is increased, their tobacco
export is likely to decrease. So, the importers will look for other alternatives, giving our tobacco
products a more suitable and larger export market, thus giving them more chance to grow overseas.