BAT is the second largest tobacco producer in the world, with a market share of 22.1% and more than 300 brands in its portfolio. BAT holds robust market positions in each of its regions and has leadership in more than 50 of the 180 markets where it does business. The company processes some 660 million kilos of tobacco leaf and producing some 853 billion cigarettes in 2004. Due to the addictive nature of tobacco products, BAT’s products enjoy a built in high level of demand, and the company’s vast array of popular brands mean that it is in a position to consistently take advantage of this demand. The strong market position of the company is a key strength for BAT.
BAT is very well diversified geographically. The company operates through 81 factories in 64 countries. However, the company’s largest market, Europe accounts for only 41.4% of its net revenues. Geographically balanced in its operations, BAT is not overly dependent on any of its operating regions. The America-Pacific region accounted for 21.3% of the company’s net revenues in 2004; while the Asia-pacific region accounted for 13.1%. In 2004, Africa and the Middle East contributed 12.4% of BAT’s net revenues and Latin America contributed another 11.8%. The company has strong market position in North America, Western Europe and Eastern Europe, three of the strongest markets for tobacco products in the world. However, this has not stopped BAT from expanding into emerging markets like China where the sheer size of the smoking population presents a significant opportunity for the company. The company’s wide geographical spread has provided it growth opportunities in diversified markets.
Control over tobacco leaf
BAT’s tobacco leaf business is large, with the group purchasing about 517,000 tons of leaf tobacco annually. Subsidiary companies operate leaf growing programs through which they provide direct agronomy support to farmers if it is not otherwise available.