Tobacco processor Pacific Cigarette Company is looking at increasing its shareholding in a Mozambican tobacco company, chief executive Mr Nick Hales said.
“We are in advanced stages of negotiations to expand our interests in Mozambique,” said Mr Hales, adding the company was looking at an investment of up to $5 million.
Without disclosing the actual shareholding the company intends to have, Mr Hales said Pacific was looking at “50 percent plus” holding in the Mozambican company.
“We have been working with then for years; providing our technical expertise,” said Mr Hales.
He said the company, previously known as Savanna Tobacco before it re-branded was geared towards becoming a dominant player on the continent.
Last year, the company registered a phenomenal growth in its local market share and has established a strong presence in export markets.
Last year, the company saw the market share of its brands growing by 65 percent compared with the previous year and now enjoys 35 percent of the local market.
Underpinning the growth was increased distribution of its broader product portfolio throughout the country, modernisation of packaging of its Pacific flagship brands as well as the introduction of high value Remington Gold brand during the year.
Pacific acquired the Remington Gold brand from local manufacturer Cut Rag Processors.
With the acquisition, Pacific now owns four key brands – Pacific, Branson, Pegasus and Remington Gold, all of which are positioned to offer high quality and competitive pricing.
Mr Hales said the company would continue exploring export markets, having already established itself in Zambia, South Africa, Mozambique and Jamaica.
The company entered the South African market through a contract manufacturing agreement and this has allowed it to grow the market share in the “highly profitable” market.
In Zambia, PCC purchased a majority equity in a cigarette manufacturer, helping it to capture a sizable market share while negotiations are at an advanced stage to increase its interests in Mozambique to grow its presence.
“2016 has built a foundation from which we are going to grow from strength to strength over the coming years,” he said.
The company will continue building up capacity in the medium term as it looks at doubling annual output to 6 billion sticks to meet the growing demand for its brands.
Source: The Herald