A new episode of the # 25 × 25 interview series powered by Schoenherr si Asociatii SCA, a special editorial project featuring 25 companies that have been in Romania for 25 years, allows us to chat with Ram Addanki, South Central Europe Director at British American Tobacco, as we try to uncover the secrets of success and the company’s remarkable longevity. in the Romanian market.
Activity report: starting from a little historical context, what can you tell us about the activity of your company? entered Romania in 1996 and your industry as a whole at the time?
Ram addanki: We started in 1996, when the first brick was laid in our factory in Ploiesti with a small group of very enthusiastic people. Today, 25 years later and after an investment of over 500 million euros, our Ploiești plant is now BAT’s second production site in Europe and among the top 5 in the world, with around 1,000 employees. Romania is also the first country in the European Union to produce Neo, the tobacco consumables for glo, the company’s most innovative device that heats tobacco without burning it.
Only a few years after the completion of the factory, BAT conquered the first place in the Romanian tobacco market and managed to maintain its leading position, putting all its resources into product quality, high-quality equipment and highly talented and qualified people. . We are proud to say that almost half of BAT’s employees have been with the company for at least 10 years. The number of our employees has steadily increased, by an average of 10% per year during the 25 years of presence in Romania so far. Today, we have over 3,000 well-paying jobs and indirectly generate another 30,000 jobs, all along the distribution and supply chain.
BR: How has your company navigated during all these years in Romania in terms of goals, achievements, challenges and opportunities?
RA: BAT has three entities operating in Romania: BAT Investment – the Ploiești production site, BAT Trading – the national distribution company, and Global Business Services (GBS) – an integrated service center. We have developed our business on the basis of clear principles and have been able to ensure sustainable growth for our company, our employees and our business partners as well. We have invested heavily in the latest technologies available, the continuous professional training of our staff and in business strategies adapted to the Romanian market and to the expectations of our consumers.
However, the challenges did not escape us. Romania has around 2,300 km of borders with third countries and cigarette smuggling has always been a major challenge for the state budget and the safety of communities. From the start, we have been committed to supporting the authorities in their fight against illicit trade through knowledge and expertise and long-term partnerships, as well as awareness campaigns that reflect the threat of the black market to society and the economy. We are proud to say that BAT’s stopcontrabanda.ro platform is the first integrator of illegal cigarette seizures in Romania and we have developed a strong partnership with the Romanian police, the Romanian border police, the national authority of the tax administration and the general directorate of customs.
We have also invested in partnering with our business partners, developing easy-to-access exchange platforms, adapting to their business needs and offering training and annual awareness campaigns related to access prevention. young people to nicotine products and legal provisions in this area. We are pleased to announce that we have a strong partnership with the National Consumer Protection Agency, to educate retailers and the public on regulations that prohibit the sale of nicotine products to those under the age of 18.
Romania now has a strong economy and a very clear and comprehensive legal framework, in particular with regard to tobacco products, being the most restrictive country in the European Union in terms of tobacco legislation, according to the 2021 Nanny State Index report published by Epicenter and the Institute of Economic Affairs. While acting with integrity in our business, we have always remained open to dialogue with the authorities to support a predictable and stable business environment. Our investments and our commitment to Romania prove that we are here to stay and work for a better future for all.
BR: What is your proudest moment in 25 years of history?
RA: Our sustained investment in product and people development pays off every time, especially in the form of moments of pride. We have succeeded in meeting the expectations of our consumers with a diverse and high-quality portfolio of innovative products, which have made us the number one choice in the tobacco market for quite some time.
We are clearly committed to the transformation of tobacco, with significant investments in research and technology. With regard to digitization specifically, we have taken innovation a step further, in the business model of the company linked to the retail trade. From 2019, BAT Romania became the first player in the industry to launch an online ordering platform for retailers, improving the data flow between the company and its business partners. In addition, in 2019 BAT developed a large infrastructure for the selective collection of cigarette butts in Romania, which are used in an energy recovery process, with more than 1.7 tonnes collected to date. In 2021, BAT became the first company to recycle its old versions of the glo electronic device, via more than 250 collection points across the country.
2020 has forced us to completely change our strategies and focus on the safety and well-being of people. We have taken all the security measures imposed by the authorities and our internal policies, we have provided the right digital support to maintain the workflow and connectivity and we have succeeded in ensuring business continuity and adapting to the new context. , without disruption or major risk. to the safety of persons. At the end of the day, we love to work and grow together. Our results make us proud every day.
BR: In the present, how would you describe the role of your business in the present? social and economic context?
RA: Tobacco has always been a major contributor to the state budget, and our presence in Romania has a great impact on its economy. BAT was Romania’s largest contributor to the state budget in 2020, with a total contribution of almost € 2 billion (RON 9.65 billion) in excise and tax and the largest player in the market tobacco, with a market share of over 50%.
BAT exports 60% of the cigarettes produced in Ploiești to other markets around the world and therefore we are one of the largest exporters of processed agricultural products in Romania. According to data released by the National Institute of Statistics in March 2021, the total export value of processed tobacco products, i.e. heated cigarettes and tobacco products, amounted in 2020 to 1 , 37 billion euros, or 45% more than the previous year. Data provided by the INS shows that in 2020, tobacco products accounted for more than half (53%) of total food, drink and tobacco exports.
We focus a lot on our employees: many of our colleagues have gained international visibility by working in different BAT markets and have returned to further their career development in Romania. In our head office in Romania there are around 20 different nationalities. We value this type of diversity because it encourages innovation, creativity and different ways of thinking. In January 2021, BAT was recognized as a Global Top Employer for the fourth consecutive year by the Top Employers Institute. We were one of 16 companies to receive Global Top Employer status for 2021, recognizing our commitment to creating a diverse, inclusive and innovative work environment that our employees love to be a part of.
BR: No one has a crystal ball, so we won’t be asking about the next 25 years. But looking in the the future, how do you see the road to 2030 for your business and the industry you represent?
RA: Well, BAT has been around for a while now, 1902 to be precise. We are a leading FTSE company with truly international credentials. Few consumer goods companies can claim more than 150 million interactions with consumers every day and distribution to more than 11 million points of sale in more than 180 markets and more than 55,000 BAT people worldwide.
However, the world is changing and our business is also on a path of transformation. We have evolved our strategy to place more emphasis on our new product categories, fueled by investments from the continued delivery of our traditional tobacco businesses. We are dedicated to the development and commercialization of tobacco and nicotine alternatives that do not burn tobacco to deliver nicotine to the user and offer adult smokers a pleasant, reduced risk alternative *.
Just as we are committed to taking a step forward in the performance of our New Categories, we are also committed to taking a step forward in our ambition for sustainable development. Recently, we announced several ambitious goals that we believe will accelerate our goal of delivering A Better Tomorrow ™ to all of our stakeholders, including:
- Increase our consumers of non-combustible products to 50 million by 2030
- Achieve carbon neutrality for our activities and for our value chain by 2050
- Accelerate our existing environmental objectives until 2025
- Eliminate unnecessary single-use plastic and make all plastic packaging reusable, recyclable or compostable by 2025
- 100% renewable electricity on operating sites by 2030.
Romania remains one of the most important countries for us and we will continue to invest and grow our business here. Over the next 25 years, we will enrich our journey by giving more back to society: by placing more emphasis on products in new categories, as reduced risk alternatives to smoking, by expanding our health protection initiatives. environment and community support, and continuing to invest in the and personal development of our people, whose diverse backgrounds, skills and a positive attitude are our most valuable asset.
* Based on weight of evidence and assuming complete smoking cessation. These products are not without risk and are addictive.