Roland Imperial Tobacco Company – RITCO is set to add depth to Zambia’s tobacco industry and become the first Zambian company to set up a Cutrag processing plant.
The cutrag processing plant is part of its combined investment being put into its new end to end ciggerate manufacturing plant located in the Lusaka South Multi facility economic Zone – LS-MFEZ at a total cost of US$50 million,
Currently, locally produced and semi processed tobacco is first exported to Zimbabwe to undergo the blending process which requires a cutrag processing plant and then re-imported back into Zambia before it can finally be processed into cigerate sticks ready for the market.
RITCO was set up with the purpose of manufacturing, trading and selling cigarettes and other tobacco related products. The company runs an existing cigarette manufacturing plant in Lusaka’s Makeni area which was established in 2013 at a cost of about US$8 million. The company had further invested US$30 million for the expansion of this existing plant.
Speaking in an exclusive interview, RITCO General Manager Alipot Ngoma told the Zambian Business Times – ZBT that the company is at present able to offer two blends or two varieties of cigarettes and has a market share of about 30% to 40%, while other players share the remaining percentages.
He disclosed that RITCO has the capacity to produce 7 billion sticks per annum while other companies can only go up to 2 billion sticks, an indication that it has the biggest investment and manufacturing capacity on the Zambian market.
Ngoma however stated that the company has recently cut down its production by about 15% due to the depreciation of the Zambian currency which generally dampens demand and competition from other players on the market.
When asked what the major challenges are for the tobacco industry, Ngoma told ZBT that the limited buyers on the market continues to be a challenge affecting profitability and marketing options for tobacco farmers and local manufactures.
He further pointed out the the other major challenge is that about 30% of the Zambian market is being taken by illicit and smuggled tobacco products, which are not taxed and lead to loss of revenue by tax authorities and government.
“Zambia is not major tobacco smoking country and this coupled with limited local buyers on the market especially that our products are only being sold on the local market makes some of the key challenges we encounter”.
“Aside this, the market has been overtaken by illicit imported tobacco products. We are therefore appealing to the government to consider banning the importation of inferior cigarettes or provide the local manufacturers with incentives to promote local production and enhance participation from the private sector,” He said.
He added that there is also need to encourage investment in tobacco processing and invest in tobacco growers saying the country needs to focus and invest in other cash crops like tobacco and cotton to avoid the having too much dependence on our traditional Copper.
The company also told ZBT that it is exploring other foreign markets and plans to start exporting tobacco to both the regional and international market. The company has already engaged some distributors in South Africa and is looking forward to start exporting value added tobacco products.
