NOTE TO: LNIR B D BRAINILEY REM -2 SEP 1993 SECRET
.....................
TSG: COST-REDUCTION OPPORTUNITIES
As requested, here is a list ofthe action points
reiatlnsz to BATCo which were mentioned in
the.Minute (attached) ofthe 12th August spec;ai
TSG meeing held to consider cost-reduction
opportunities.
I Price Wars (varn 2): Hilary BarTon and Pauj
Bingham are to produce a paper for the Sth
December TSG meetinu settinia out case histories.
lessons to be learned from them, and
analysl ng potential areas ofnisk. Paul hasbeen
informed ofhis and will be working
through Hilary but I have also asked him to keto
you informed ofprogress and to agree
tile "inal (BATCo) paper with vou prior to
su.-mission :o the TSG
Outsourciniz (parn 13): The %linute r6ers -,o the
use ofouEsourcing by BATCF an-d
suggests thit 'these could be interesting :deas
Cor BATCo in Europe' (i.e. there is no
explicit BATCo action requirement) Tils paragraph
has been drawn tD Jimmi
Rembiszewski's att"tion and he has been asked to
Follow-up on the idea ofBATCo
experimenting with outsourcing Field forces (c-.
par-s of their work). I have not asked JR
for any explicit report or briefing 3r. this - do
-,cu %vish me to do sol
3 Canida/Southanii)ton (Para 26): This paragraph
indicates hat 'Mr Bramley will
investigate the possibility of manu-'_=urma :c:-
-he Canadian market in Southampton'.
Norman Davis has been asked to f~cllo%,-uu on this
I have also asked ND to provide you
with a TSG briefing note on prog:-css on it lis
issue (if lie is in a position to do so).
In addition, your briefing notes for die 1,-~th
May TSG meeting indicated that. following a
discussion at tile February TSG meeiing, Da,. id
Stimson 'nad been in touch with the V-P of
Manufacturing at ITL and confirmed that~-
ITL would not be seeking tc use BAT Co or B&,W
capacity.
ITL were lookine at linkino with a hird-party US
manufacturer.
ITL would review tile situiion ,;:h ~~;rlch Her-e7
.1 110 Costs (vara 23): You noie,_~ %our concLrn
at the -ost of headquariers and indicated
,hat BATCo %%,ould address this ,%;len P-o ez-.
Rubicor~ has sefled down There is 110
explicit action in hand on this. it might also
'.-e inappropriate to implement such action in
the near future, depending on the conC!L;Si0n5
7e2Ched it the TSG discussions on 9th
September.
Ration-Misarioii Opportimities (naris 29 & _301:
YOU die%,. attention bere to the
ratio nalisation opportunities ofCentrai Amer:zian
Leafope:-ailons and factories (noting
thac a strate,-,.v paper is being prepired oil
i!ie Caribbean). Africa, smailer planEs in
Europe. BAT China and Hong Kong. cowl-mes xne7e
BATCo has ad:-acent GLT plants.
tile possib lit.v of exiting From L=':n kegs -,he
cppcrtun-t es for making rnore
Group purchases throus-fli Millbarl. ine. posz:nie
Jou.-.-isizing ol'ffacdities in some
coun-mes. tile size ofthe maruin :rt .ac:oi-, and
-,ho -ciader. !he contrac-inu out
possible sales ot',~;r.or.:s asSe:;. the ia% ~2.-
_,fmanaueinent above G1%Is.
13 ATCO CONFIDENTIAL - CATEGORYENTINNESOTA TOBACCO
LITIGATION.
BATCo document for Province of BritiSh Columbia 25
October 1999


and the duplicauion of export offices across the
Group. No explicit actions have been put
in hand on these (other than any work already
underway).
6. ELT/Souzi Cruz Canicitv (inarn 38): The Nfinute
noted that you would ask
Ian Snowden to investigate (with Messrs Harrison
and Banneman) whether BAT has
surplus GLT capacity between ELT and Souza Cruz.
Ian Snowden was informed of this
and I have asked him to let you have a briefing
note on progress with this issue as part of
your usual TSG briefing.
7. Blended Cinacitv (nirn 41): This paragraph
-e-f-ers to the agreed delay '-Or the blended
line in Southampton. It notes that'Mr Herter
st.-essed that we would nee,-,' -o look ac.-oss
the Group for biended capacity before investing in
Southampton'. No action has been
instiamed as a direct result ofthis statement - do
you wish N-D to carry out an expilc*1
review. or -,vould you pre:-er to await the
outcome of the Ear' KohnhorsZ 7e% lew (para 42)
cC:otal Group capacity sclieduled for the December
1993 TSG mecuny"
8 Standn rdisation of Production (rinrn 431: You
were required to ask Nornian Davis to
update On parallel to the Earl Kohnhorst
capac:-.-.- review) the work on t~e
szandardisation
ofproducticn. particulark.. ofIBs I asked (on I
71th August) ND to on `,-.is and
to report back to you. I have also asked NID to
provide you with a brie4i`2 7iote on
progress on t~-:s issue, for the Sth September TS
G meeting fif he is in a p-csition to do so)
9 Grotia Mnehinerv Orderine (Pirn 43): You were
committed to askinz Rocer Beck
whether the p-,ocedures For Group ordering
ofmachiner-., from major SLppilerS is
satisfactorli% This was passed on to RB and lie
will be :)ro%:d;,nz a brie~`ina note for you
for the 8th Sectember TSG meetinu.
10 Leif Denimid 0mr-i 49): You ap-reed to Pact
lar, Snowden -o review Ccr-2~:_~sts ,-or leaf
demand- to consult LeafD Irectors as to how much
Tobacco is being brought from outside
the Group. and to identify, the prices being
charged to the Group as opposed to third-party
customers IS was asked to progress this, and %,iii
provide you with abrie"ing note for the
Sth September TSG meeting.
One area %~.here BATCo was ~10E charaed with
ac::c~i. but wherz we mid, it iz-2:
InVoked. -e;.ites -,o paragraph '_4 which notes
the 131;1-W Pmjec: Core work cc,`ng fc~
breakthrough pr,-_~~.ic: cost reductions.
G J BURGESS
GJB.'c:r-,,
ist AL;uust !,~c'
13 ATCO CONFIDENTIAL - CATEGORY [:.MINNESOT.-k
T013ACCO LITIGATION.
C__
BATCo document for Province of BritiSh Columbia 25
October 1999