BAT Bangladesh to invest Tk297cr to expand production capacity
Following the decision to shut down its cigarette manufacturing facility in Dhaka’s Mohakhali, the company plans to expand production at its existing plant in Savar on the outskirts of the capital
British American Tobacco (BAT) Bangladesh, a multinational cigarette manufacturer, has decided to invest approximately Tk297 crore to enhance its production capacity, according to a disclosure made public today (26 June).
The decision was approved at a board meeting held on Wednesday, June 25, a company source told TBS.
The publicly listed company's share price increased by 2.82% to Tk280.30 on the Dhaka Stock Exchange today.
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Following the decision to shut down its cigarette manufacturing facility in Dhaka's Mohakhali, the company plans to expand production at its existing plant in Savar on the outskirts of the capital. The entire proposed investment will be allocated to the Savar factory.
The investment will be financed through a mix of internal funds and bank loans. The final breakdown of funding sources will be determined after a review of the company's cash flow, according to the company's disclosure.
An official of the company, seeking anonymity, said that the relocation of the factory will not disrupt the supply chain. Production has already begun at the Savar factory. Previously, the demand for cigarettes in the country was met from the Dhaka factory, but following the relocation, this demand will now be fulfilled from the Savar facility.
Last week, the company decided to shut down operations at its Dhaka factory from 1 July, following the Supreme Court's rejection of its appeal to extend the land lease agreement. It will also relocate its head office from Mohakhali DOHS to Ashulia of Savar on the same date.
According to its annual report for 2024, BAT Bangladesh has been leasing the factory premises from the Dhaka Cantonment Board since 1964. Each lease term spans 30 years, with the option to renew for a total duration of up to 90 years.
The first factory in Bangladesh (then East Pakistan) was set up in 1949 at Fauzdarhat in Chattogram, and in 1965, the second factory of the Pakistan Tobacco Company was set up at Mohakhali.
BAT Bangladesh got listed on the bourse in 1977. Every year, the multinational has been paying a handsome dividend to its shareholders.
In 2024, it made a gross revenue of Tk43,231 crore, and after paying supplementary duty and value-added tax (VAT) to the national exchequer, its net revenue stood at Tk9,944 crore.
It made a profit of Tk1,750 crore with an earnings per share (EPS) of Tk32.42. It paid a 300% cash dividend to its shareholders for 2024.
In the first quarter from January to March of 2025, BAT Bangladesh recorded Tk9,597 crore in gross revenue despite a sharp decline in cigarette sales.
According to the company's unaudited Q1 financials, its net profit dipped 23% to Tk318 crore, down from Tk413 crore last year. Its EPS fell to Tk5.89.
