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British American Tobacco Bangladesh Corporate Social Responsibility
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BRITISH AMERICAN TOBACCO BANGLADESH
VISION-“TO extend its leadership through world class performance.”
SLOGAN-“Success and responsibility go together.”
About the company-British American Tobacco Bangladesh is the member of British
American Tobacco plc which is the 2nd
largest company in the tobacco industry in the
world based in UK. British American Tobacco Bangladesh has two factories in
Bangladesh. The cigarette manufacturing factory (Dhaka factory) is located on the same
premises as the head office in Mohakhali, Dhaka. The Green Leaf Threshing Plant
(GLTP) is situated in Kushtia.
More:::::::
The British American Tobacco Group is one of the world‟s leading international
manufacturersof some of the best tasted cigarettes whose brands are sold in 180 markets
around the world.Although it is operating in one of the most controversial market it has
been doing an impressivebusiness in spite a number of restrictions and barriers.BAT
produces high quality tobacco products to meet the diverse preferences of millions
ofconsumers, and work in all areas of business. In the shortest sentence, their business
can bedescribed as “From Seed to Smoke”. The companies are committed to providing
consumers withpleasure through excellent products, and to demonstrating that they are
meeting its goals in waysthat are consistent with reasonable societal expectations of a
reasonable tobacco group in the 21 stcentury.British American Tobacco Company P.L.C.
is one of the world‟s leading international tobaccocompanies operating with 85 factories
in 66 countries and producing about 800 billion cigarette peryear. The company
represents more than 300 brands in its portfolio. For more than 100 years,British
American Tobacco has been building an international reputation for producing high
qualitytobacco products to meet the diverse preferences of consumers. Leading edge
manufacturing, focuson quality and excellent distribution capabilities enable the company
to deliver consistent qualitypremium products in 180 markets contributing to a global
market share of 14.6% (as in 2002) andmore than 15% (as in 2003). The company is
based in London, UK, operating globally withstrength of almost 90,000
employees.British American Tobacco Company (BATCo.) is one of the pioneers in
Tobacco manufacturesof the world. The journey of this company started long back.
BATB was established back in 1910as imperial Tobacco Company Ltd. in the beginning,
it was known as Imperial Tobacco CompanyLimited in the undivided India in 1910.
Having its head office in Calcutta, in the year 1926 aA RELATIONAL STUDY ON
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PERCEIVED ORGANIZARIONAL SUPPORT, SUPERVISORY SUPPORT, WORK
CLIMATE AND EMPLOYEE SERVICE QUALITY2branch office was made in the
Sales Depot of Moulovi Bazar After independence, BangladeshTobacco Company (Pvt.)
Limited was formed in 1972 under the Companies Act 1913, with theassets and liabilities
of PTC. In 1973 BTC (Pvt.) was converted into a public limited company.British
American Tobacco played a pivotal role in BTC's creation in 1972 and involved in BTC's
development every step of the way. BTC has proved to be the perfectrepresentative of
BAT by manufacturing and marketing quality brands, which met BAT standards.The
company was formed with an objective to establish a worldwide business. British
AmericanTobacco Bangladesh (previously known as Bangladesh Tobacco company), has
changed its nameon March 22, 1998 was incorporated under the company Act 1913 on 2
nd February 1972, as asubsidiary of British American Tobacco Bangladesh
(BATCo.).Main business of BATB is tobacco, which involves the growing and
processing of leaf tobaccoand manufacturing, marketing and distribution of cigarettes and
pipe tobacco through outBangladesh. The company has been exporting tobacco to the
markets in developed countries likeU.K., Germany, Poland, Russia and New Zealand.
BATB is one of the highest contributors ofnational revenue. “Quality First” is the main
theme of the company and due to its total commitmentto the quality of the product the
company has been doing very well in the local market.Operating in the country since pre-
independence, the company headquarters and cigarette factoryare based in Dhaka, with a
tobacco threshing plant in Kushtia. The company currently employeesmore than 200
managers and has a work force of 1,300 workers and 14,000 registered farmers in
itsKushtia threshing plant producing the world finest tobacco and exporting to other
countries andother tobacco companies locally for their living standards. British American
Tobacco Bangladesh(BATB) is listed in the Dhaka Stock Exchange (DSE) with an
authorized share capital of Tk.600,000,000 comprised of 60,000,000 ordinary shares of
Tk. 10 each. With a market share of 48%,65.91% of the company‟s shares are held by
Raleigh Investment Co. Ltd, UK; 26.99% byA RELATIONAL STUDY ON
PERCEIVED ORGANIZARIONAL SUPPORT, SUPERVISORY SUPPORT, WORK
CLIMATE AND EMPLOYEE SERVICE QUALITYInvestment Corporation of
Bangladesh; 2.86% by Shadharan Bima Corporation; 0.84% byBangladesh Silpa Rin
Sangstha; 0.65% by the Government of Bangladesh; 0.52% by Sena KalyanSangstha and
2.23% by others.British American Tobacco recently suffered a sharp fall into its revenue.
Its profit after tax wasdrastically reduced by 44,04,30,000 taka. So, management concern
is to check out whether theservice quality of the employee by any means is related with
the circumstances occurred. In orderto do so, the researcher intent to examine the
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relationship among perceived organizational support,supervisory support & work climate
(Independent Variables) with employee service quality
(dependent variable).
Products
Cigarettes
Not all cigarettes are the same. Smokers around the world prefer many different tastes
and strengths and our companies aim for excellence in every step of manufacturing.
Cigarette design is more complicated than it may seem. Our companies work to
understand the preferences of adult consumers and to design cigarettes to meet them. It‟s
the preferences of adult consumers that guide our tobacco blends – the mix of tobaccos
that we use – and we work to ensure that these grades are available long-term to keep the
tastes of our products consistent.
Food-type ingredients and flavourings are added to some types of cigarettes – typically
American style blends – to balance the natural tobacco taste, replace sugars lost in curing,
and give individual brands their characteristic flavour and aroma. Other ingredients
control moisture, protect against microbial degradation, and act as binders or fillers. For
more information,
Nicotine is not added in making cigarettes. It occurs naturally in all varieties of tobacco
plants.
The filter, paper and level of filter ventilation are all chosen to affect the sensory strength
and smoke yield of the cigarette. At each stage, there is constant quality control and
testing.
Main parts of a cigarette
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Cigarettes have four basic components:
The tobacco rod
The cigarette paper around the tobacco rod
The filtration zone
The filter and tipping around the filtration zone.
The tobacco in the rod includes tobacco lamina (the flat part of the tobacco leaf), tobacco
stem (midribs of the leaf), and expanded lamina.
The cigarette paper includes paper and adhesive.
The filter is made mainly from cellulose acetate fibres, known as tow. Cellulose acetate
is derived from wood pulp. The fibres are bonded together with a hardening agent,
triacetin plasticizer, which helps the filter to keep its shape. The filter is wrapped in
paper and sealed with a line of adhesive. Sometimes charcoal is added to filters.
The tipping paper includes paper and adhesive.
Design adjustments achieve different strengths and tastes, and can reduce smoke yields of
various smoke components, as measured by a standardised machine method. See
Cigarette design and manufacture on the drop-down menu.
Smokeless snus
What is snus?
Snus is finely-ground moist tobacco that comes either loose or in tiny pouches which are
placed under the upper lip. It contains nicotine in similar quantities to cigarettes. Each
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pouch contains from 0.4 to 1.5 grams of tobacco and is held in the mouth, without
chewing or sucking, for about an hour before being discarded. Daily use varies from
person to person.
Making snus
Snus is different from other kinds of smokeless tobacco, because it‟s „pasteurised‟ with
heat. It is made by grinding sun-cured and air-cured tobacco leaves, adding water, salt
(for taste) and humectants to keep it moist. It is then heated in a process similar to
pasteurisation.
The heating process reduces the formation of tobacco-specific nitrosamines – chemicals
which are potentially carcinogenic and have historically been found at relatively high
levels in other forms of oral tobacco, such as some types of chewing tobacco.
The Swedish National Food Administration Service reported in 2004 that research shows
a decrease in nitrosamines in Swedish snus of around 85 per cent over 20 years.
Brands
BATB’s business is not about encouraging people to start smoking or to smoke
more, but about meeting the preferences of adults, who have chosen to consume
tobacco, and differentiating our brands from the competitors.
It manufactures and market high quality and well established international cigarette
brands. Our current brands are Benson & Hedges, John Player Gold Leaf, Pall Mall,
Capstan, Scissors, Star, Pilot and Bristol, which are positioned in four segments in the
Bangladesh cigarette market.
1 Benson & Hedges
Launched in 1997, Benson & Hedges maintains our prime market share in the Premium
segment. Within a short time Benson & Hedges became a successful brand in our
portfolio.
2 John Player Gold Leaf, Pall Mall and Capstan
John Player Gold Leaf, Pall Mall and Capstan are positioned in the High segment.
Launched in 1980, John Player Gold Leaf is one of the highest selling brands of our
company, enjoying large market share in the High segment. Pall Mall was the Group‟s
first Global Drive Brand to be launched in Bangladesh in 2006.
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3 Star and Scissors
Star and Scissors are positioned in the Medium segment. Star, launched 40 years ago, is
still a leading brand in this segment. Currently, it is the highest volume generating brand
for the company.
4 Pilot and Bristol
Pilot was launched in 2009 in the Low segment, which is growing rapidly in Bangladesh.
Bristol was launched also in the Low segment in October 2010.
CORPORATE SOCIAL RESPONSIBILITY
The company has established a Corporate Social Responsibility (CSR) Steering Group
chaired by the Managing Director and consisting of the Deputy Managing Director and
all function heads. It is responsible for the review of Stakeholder feedback, the
development of responses, the integration of CSR principles into its business activities
and overseeing the preparation of the Social Report.
Identification of stakeholders-
Government-Finance, Environment & Forest, Commerce, Industries, Health, Law,
Agriculture, Police/BDR/Coast Guard, Local Administration, Others etc.
Academicians-Teachers, Researchers.
Legal Community
Medical Community
NGOs
Think Tanks
Anti Tobacco Groups
Media-Print, Electronic
Political Group
Business Group
BATB‟s business partners-Distributors/Retailers/Cash & Carry, Suppliers,
Tobacco groBATBrs
International Organizations
Students(Adults)
Human Rights Organization
Neighbor/DOHS
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Afforestation
BATB started its afforestation programme when BATB joined hands with the Forest
Department in 1980 to conserve the forests and combat the negative impacts of climate
change. Till now, BATB has contributed around 67.5 million saplings throughout
Bangladesh. This probably makes its imitative the largest private sector driven
afforestation programme in the country. Its endeavitss have received several awards both
at the National and Local Government levels. BATB will distribute fits million saplings
in 2011.
Safe drinking water: ‘Probaho’
For millions of people in Bangladesh, the only available drinking water is laced with
arsenic and therefore extremely hazardous to health. Having recognised the gravity of the
issue, BATB has stepped forward with the „Probaho‟, Bangla for „flow‟, project. Through
Probaho, BATB aims to provide rural communities with safe drinking water. This
initiative is also aligned with the Government‟s aim to achieve the Millennium
Development Goals (MGDs). Using Government approved community based water
filtration technology, its 18 water filtration plants in Manikganj, Satkhira, Meherpur,
Kushtia, Jhenidah, Tangail, Kurigram, Lalmonirhat and Chuadanga districts provide
approximately 95,000 litres of pure drinking water for 47,000 people every day.
Sustainable agriculture
Its supply chain starts with the hard work of around 34,000 registered farmers within the
village community. Therefore, BATB tries its best to ensure that its sitsces are
sustainable and responsible. BATB aims to do this by proactively setting high standards
for agricultural practices. Its initiatives include Green Manuring with Dhaincha (Sesbania
aculeata)- an effective approach in enriching soil health and fertility. Dhaincha is also
promoted as alternate fuel in leaf growing areas. Moreover, BATB has introduced
Integrated Pest Management Clubs and Farmer Field Schools in collaboration with the
Department of Agriculture Extension to educate its farmers about the adoption of Good
Agriculture Practices.
As their slogan is “Success and Responsibility go together” they are the first company to
prepare a social report that complies with the rigorous global benchmarks of the AA 1000
standards and the United Nations Foundation sponsored global reporting initiative
guidelines. They have formulated the expectations (approximately 122) of stakeholders
under ten main headings through a discussion with the stakeholders.
These are as folloBATBd along with their solutions-
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Consumer information (12%):
Stakeholders expressed that current warning clause printed on cigarette packets and all
tobacco advertisements BATBre inadequate.
BATB position and response-In response to stakeholders‟ expectations they have
decided to provide additional information on smoking and health risks. They will help by
providing additional relevant information to the government to assist them in this area if
they are asked to do so.
BATB Commitment-will support reasonable and enforceable laws by the government, in
respect of improved health warnings on packets and brand communications and also will
provide additional information on smoking and health through distribution of the
„smoking and health risks-its views‟ booklets amongst stakeholders also distribute
consumer leaflets.
Public Smoking (7%):
Stakeholders expressed their view that laws should be enacted to restrict public smoking.
Opinions BATBre also expressed regarding protection of smokers‟ rights.
BATB position and response-They want to support initiatives of the government to
restrict smoking in public places and will work the government to have clear definitions
of public places with the objective of protecting nonsmokers‟ and smokers‟ rights.
BATB Commitment-will support initiatives of the government to restrict smoking in
public places.
LoBATBr Risk Products(2%):
Stakeholders expressed that they would like to see BATB undertake long term research
programme for developing products which would be less harmful to consumers.
BATB position and response-British American Tobacco‟s central research and
development (R&D) based in London, UK are coordinating their efforts in this respect.
But they have suggested that the only way to avoid the risks of smoking is not to smoke,
and the best way for smokers to reduce the risks is to give up smoking.
Youth smoking prevention(13%):
Stakeholders expressed that cigarette advertisements which attract the youth should be
stopped. They urge to make advertisements showing harmful effects of cigarettes on
children. They want to restrict availability of cigarettes to underage.
BATB position and response-They will support any government initiative which
suggests practical solutions to underage smoking and to enforce the law on juvenile
smoking which prohibits sale and purchase of tobacco products by the underage. They
have clear company policy which they communicate to their distributors, not to engage or
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sell cigarettes to underage vendors. They have stopped all the brand advertisements on
TV.
BATB Commitment-will continue to work with other third parties, including the
government, in order to make improvements to its Youth Smoking Prevention (YSP)
campaign.
Responsible marketing(10%):
Stakeholders expressed that tobacco advertisements are too aggressive, often taking
almost the entire attraction of a vieBATBr. They have said that indirect advertisements
through sports sponsorships like cricket should be avoided just like direct advertisements.
BATB position and response-They have voluntarily stopped advertising in the electronic
media and print media. They have also recommended to the print and electronic media
that they introduce their own code of conduct to restrict aggressive and unethical tobacco
advertisements.
BATB Commitment-will follow all the guidelines provided by the regulatory agencies in
case of promoting their products.
Tobacco regulation(4%):
Stakeholders BATBre concerned about the poor enforcement of laws relevant to the
industry which they felt was contributing to the rapid increase in the numbers of smokers
in the country. They want support enforcement of laws to restrict tobacco related
products.
BATB position and response-BATB advocates and supports practical and enforceable
tobacco regulation. They will support the government on regulations providing realistic
solutions to relevant tobacco issues.
BATB Commitment-will record proactive engagements with the government on a
quarterly basis.
Tobacco Taxation and Cigarette pricing(2%):
Stakeholders expressed that tax on tobacco products should be increased to a prohibitive
level to discitsage consumers from purchasing the product.
BATB position and response-Cigarettes are already heavily taxed with as much as 70%
of the retail selling price going to the government.They have already engaged with the
government and National Board of Revenue(NBR) to ensure reasonable, sustainable
growth in government revenues.
BATB Commitment-will keep relevant evidence of dialogue with the NBR and BCMA
for reasonable excise rates that supports revenue generation without encitsaging
counterfeits and smuggling.
Issues relating to environmental management, corporate citizenship and
corporate governance
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Environmental management(16%):
Stakeholders expressed their concern regarding the impact that tobacco cultivation has on
the environment.They also expressed their concern regarding soil fertility issue due to
tobacco cultivation.Stakeholders mentioned that BATB should make more meaningful
contributions to environmental management.During this session five main themes
emerged-
1. Afforestation
2. Alternatives to wood fuel
3. Fertilisers
4. Soil conservation
5. Product waste and factory emmisions
BATB position and response-BATB is in a position to influence directly some of the
environmental impacts occuring the product life cycle. Their aim is to eliminate or
minimize these impacts to reduce the burden on the environment. In line with this
approach BATB is already focusing reducing wastes, promoting recycling, reducing
water comsumption,using raw materials efficiently, improving soil‟s nutrient
composition, introducing alternatives to agricultural chemicals and wood fuels in tobacco
growing, reducing depending on fossil fuels and atmospheric emmisions.They manage
the country‟s largest private afforestation programme and distribute more than 3.5million
saplings annually. In the last two decades, they have distributed and planted more than
42.5 million saplings. They have received the first prize of Prime Minster‟s tree
plantation award in 1999.They meet 70% of their wood fuel requirements through
alternatives like paddy straw, jute stick, dhoncha stick etc.They use potassium sulphate
which is recommended by Bangldesh Agriculture Research Council(BARC) .They also
recommended balanced use of fertilisers on the cultivation process. They buy the best
valuable non-adulterated fertilisers from the government in bulk and supply at cost price
to the farmers. Soil fertility actually improved by tobacco cultivation but they still
conduct soil quality test in tobacco growing areas from time to time to determine the
fertility status. Their farmers have already taken up soil fertility programme.Every year
they obtain a clearance certificate from the department of environment(DOE) which
testifies that they are abiding by all environmental laws and regulations relevant to their
operations. Any smoke residue from th e wood-fuel burning is emitted high in the air at
about 12-14 feet. The residual ashes are used as fertilisers.
BATB Commitment-will conduct the ongoing biodiversity assessment of their
operating areas based on which specific improvements in their afforestation programmes
will be designed and implemented.
Corporate citizenship(31%):
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Stakeholders suggested that BATB should take up such economic activities which would
help the company to diversify and create more employment opportunities.Stakehlders
listed a number of expectations regarding the role of BATB in CSR:
Six main themes emerged in this list-
1. Role as a development partner
2. Corporate sponsorship and poverty alleviance
3. Support to tobacco farmers
4. Support to health programmes
5. Support to education programmes
6. Eliminating child labor
BATB position and response-BATB has always conducted business in Bagladesh
responsibly. Their corporate citizenship has a much wider reach. They are involved in
various projects and initiatives, in improving the environment, supporting philanthropic
organizations, promoting art and culture and assisting with disaster relief. They play a
significant role in human resitsces development in the country. They run management
development programmes which are attended by managers of other business houses.
They offer internship programme for graduates and they also provise marketing skills
development programme for BRAC.They promote indigenous culture by including
Rabindra sangeet and Baul sangeet in their Star search programme.They also sponsor
annual Lalon festival in Kushtia.They employ many women managers in order to con
duct their business butr they do not have any women worker directly employed in their
facory.Tobacco cultivation has a direct and indirect impact on the local economy and
poverty alleviation. It also genrates employment for 100,000 people over the fits month
growing season. They run many programmes such as advising in the area of poultry
rearing, vegetable and fruit cultivation to make life easier for farmers. They also try to
facilitate bank loans to support farmers. They have initiated medical check up
programmes for farmers but they do not compensate smokers affected by smoking. They
are also involved with eye donation and blood donation programme and they also provide
support health programmes such as Center for Rehabilitation for paralysed (CRP).They
have a basic IT education center in Kushtia.They will promote higher education to
farmers‟ children as BATBll as adult literacy programmes for farmers. They do not
encitsage child labits in their business area.
BATB Commitment-will keep contributing in the tobacco export business of the country
and also keep continuing current various types of programmes related to culture.
Corporate Governance(3%):
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Stakeholders stated that BATB is a good company and they would want to see the
company continue with its operations. Company‟s vision statement should include social
responsibility and the company should not take all the profit out of the country. They
should actively participate with the customs intelligence to control smuggling.
BATB position and response-In 2002 they have introduced a new corporate slogan
“success and responsibility go together” which supports their vision and emphasizes their
commitment to be a responsible company.BATB is a public limited company in this
country and there are some shareholders of this company. They get dividend from the
company against their share. They provide any relevant appropriate in formations for
supporting to control smuggling, counterfeiting and will continue to do so.
SOCIAL AND ECONOMIC CONTRIBUTION
One of the largest revenue generator in private sector.
Has planted and distributed 42.5 million trees with a sapling survival rate
exceeding 90%.
Has successful biodiversity program specifically emphasizing on water, air and
energy.
Has partnership with the Students‟ Anti Smoking Committee(SASC).
Has been providing Basic IT Education and Basic English at free of cost in rural
areas.
Has signed an agreement with Agro-based Industries & Technology Development
project to produce quality vegetables for export.
Established a call center which provides business consultancy and technical IT
supports to different BAT companies in Sri Lanka and Middle East.
Installed a bio-filter at a cost of 6 crores for environmental health and safety
practices.
Provides support to programmes like Shandhani‟s Posthumous eye donation, the
government‟s Polio vaccination programme and blood donation programme etc.
Gives support to the people of that regions which are affected by natural disasters.
ACHIEVEMENTS
Has won the Food and Agricultural organization award for pioneering the
development of vegetable seed industry in Bangladesh
1st prize of Prime Minister‟s National Award on Tree Plantation in 1999 and 2002.
The Prime Minister‟s Afforestation Award in 1993.
The President‟s Award in Agriculture in 1976.
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The FAO Award in 1999
The National Export Trophy Award in 2000.
Measurement of CSR to Stakeholders:
As BATB has identified stakeholders, it has some responsibilities for its stakeholders.
From the discussion held betBATBen BATB and its stakeholders, BATB have got some
ideas where the stakeholders have some expectations from BATB. They expect some
non-profitable activities from BATB in order to control tobacco business in the country.
A total of 122 expectations have come up through the discussion and all of them fall in
ten main categories.
Figure: Percentage of expectations
Most of them have strong logical base to conduct and BATB is trying to meet these
expectations for many years. Majority of these are being conducted successfully
throughout the country under supervision of BATB. Few of these expectations are
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coming to consideration of BATB and they have already started working on these. BATB
has some strong responses and positions over each and every expectation and they also
have commitments regarding the demands from stakeholders. BATB has achieved many
awards from many organizations including government for contributing a lot in the social
and economic context of Bangladesh. It implies that BATB is doing BATBll and putting
best effort in conducting social responsibility in their chosen areas.
‘YITS VOICE SURVEY’ result-
0102030405060708090
100
Cultu
re
Freed
om th
roug
h re
spon
sibi
lity
Ope
n m
inde
d
Pay
&Ben
efits
Ent
erpr
ising
Spirit
Lead
ersh
ip
Cor
pora
te R
espo
nsibility
BATB
Global high performance
norm
From the survey stated above it is clearly seen that BATB is performing extremely in
order to satisfy their stakeholders. In comparison to global high performance, BATB is
clearly serving BATBll in terms of culture, freedom through responsibility, open
minded, pay & benefits, enterprising spirit, leadership, CSR etc.As the stakeholders
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have been selected by BATB itself, BATB think the stakeholders are being reasonably
served by BATB.
In the context of conducting corporate social responsibility they are doing comparably
BATBll than others. Their stakeholders getting proper feedbacks against their
expectations.