British American Tobacco ends second Myanmar stint as country descends into chaos

BAT’s joint venture company in Yangon

London-headquartered cigarette maker British American Tobacco (BAT) will withdraw from military-ruled Myanmar by the end of this year and cease all of its operations in the country, joining other multinationals such as Telenor, Kirin, Metro, VPower and a number of convenience brands calling it quits in the ruined nation.

According to a Reuters report published on October 12, the company said the decision was made after it assessed the “long-term viability” of its Myanmar business.

“Having evaluated the long-term operational and commercial viability of our business in Myanmar, we have taken the decision to withdraw from the country and cease all operations,” a BAT spokesperson was quoted as saying in the report.

BAT re-entered Myanmar in 2013 in a time window between the end of half a century of military rule in 2011 and the devastating coup in February this year. It was active in the nation before but left on request of the UK government in 2003 over human rights violation concerns.

Local joint venture said to be close to the military

For its second foray into the country, BAT set up a joint venture with local company IMU Enterprise, a unit of Sein Wut Hmon Group, which is believed to have ties to the Myanmar military given the broadness of its business interests.

The joint venture called British American Tobacco Myanmar was launched to manufacture, distribute and market the BAT brands in Myanmar’s domestic market and produce its own “London” brand of cigarettes in a country with still heavy smokers at an investment of $50 million over five years and 400 staff.

Chaos since the coup

However, Myanmar has fallen into chaos since the coup, with the country’s currency, the kyat, losing more than 60 per cent of its value in September alone, pushing up food and fuel costs and making it increasingly difficult for companies to pay for imported raw materials. The World Bank has forecast an 18 per cent contraction in gross domestic product this year for Myanmar.

Foreign currency is now believed mainly to be obtained by the military rulers from sales of drugs and gems through “informal” channels.

As a result, the US, UK, Canada and the European Union have responded by imposing targeted sanctions on the military and its vast network of – increasingly compromised – business interests.



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[caption id="attachment_37692" align="alignleft" width="300"] BAT's joint venture company in Yangon[/caption] London-headquartered cigarette maker British American Tobacco (BAT) will withdraw from military-ruled Myanmar by the end of this year and cease all of its operations in the country, joining other multinationals such as Telenor, Kirin, Metro, VPower and a number of convenience brands calling it quits in the ruined nation. According to a Reuters report published on October 12, the company said the decision was made after it assessed the “long-term viability” of its Myanmar business. “Having evaluated the long-term operational and commercial viability of our business in Myanmar, we have...

BAT’s joint venture company in Yangon

London-headquartered cigarette maker British American Tobacco (BAT) will withdraw from military-ruled Myanmar by the end of this year and cease all of its operations in the country, joining other multinationals such as Telenor, Kirin, Metro, VPower and a number of convenience brands calling it quits in the ruined nation.

According to a Reuters report published on October 12, the company said the decision was made after it assessed the “long-term viability” of its Myanmar business.

“Having evaluated the long-term operational and commercial viability of our business in Myanmar, we have taken the decision to withdraw from the country and cease all operations,” a BAT spokesperson was quoted as saying in the report.

BAT re-entered Myanmar in 2013 in a time window between the end of half a century of military rule in 2011 and the devastating coup in February this year. It was active in the nation before but left on request of the UK government in 2003 over human rights violation concerns.

Local joint venture said to be close to the military

For its second foray into the country, BAT set up a joint venture with local company IMU Enterprise, a unit of Sein Wut Hmon Group, which is believed to have ties to the Myanmar military given the broadness of its business interests.

The joint venture called British American Tobacco Myanmar was launched to manufacture, distribute and market the BAT brands in Myanmar’s domestic market and produce its own “London” brand of cigarettes in a country with still heavy smokers at an investment of $50 million over five years and 400 staff.

Chaos since the coup

However, Myanmar has fallen into chaos since the coup, with the country’s currency, the kyat, losing more than 60 per cent of its value in September alone, pushing up food and fuel costs and making it increasingly difficult for companies to pay for imported raw materials. The World Bank has forecast an 18 per cent contraction in gross domestic product this year for Myanmar.

Foreign currency is now believed mainly to be obtained by the military rulers from sales of drugs and gems through “informal” channels.

As a result, the US, UK, Canada and the European Union have responded by imposing targeted sanctions on the military and its vast network of – increasingly compromised – business interests.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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