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Smoke rises from a burning cigarette.
British American Tobacco South Africa (BATSA) says it has begun engaging workers and unions in the Section 189 process that could result in up to 230 job losses at its sole cigarette factory in the country.
BATSA confirmed this week that it was shutting down its Heidelberg plant in Gauteng, blaming the rapid growth of illegal cigarettes.
The company says nearly three-quarters of all cigarettes sold in the country are now illegal, making local production too costly to continue.
Head of Corporate & Regulatory Affairs at BAT Sub-Saharan Africa, Johnny Moloto explains: “It means that as a business that is now operating only at 35% or a manufacturing facility that’s operating in only 35% of its total capacity, it’s unsustainable or unviable. It’s no longer possible to keep this local factory going. So that is the main driver behind this. Because you are competing in an unequal playing field.”
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