PRIVATE & CONFIDENTIAL
TOBACCO DIVISION BOARD OF MANAGEMENT
Minutes of Meeting held on Tuesday 10th July 1973.
Present: Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
P. Macadam (Chairman)
K.E. Haines
J.T. Husbands
C.H. Stewart Lockhart
A.D. McCormick
P. Sheehy
T.A.H. Slack
E.J. Symons
In Attendance: Mr. B.G. Pearson (Secretary)
7/1 REPORTS
It was agreed that members
Secretary when they intend
visiting No. 1 to report.
other B.A.T. Board members
7/2 BRAZIL
of this Board ill inform the
to report on trips or to incite a
The Secretarv will then inform
in advance.
(All members
Mr. Macadam reported thaz, together with Messrs.
Husbands and
he had visited Nickersons, seed developers, in
Lincolnshire. Souza Cruz are under pressure from
the governiner,7
to assist in increasing food production. Mr.
Macadam favours
promotion of arable agricultu-re although Mr.
Riaby favours
meat production. In the end, improved arable
agriculture might
assist meat production. Mr. Nickerson will visit
Brazil
shortly and ill report back. Any development would
be a P.R.
gesture to the government and, if successful, may
later be
extended to other countries.
7/3 CANADA
Mr. Macadam reported that ITPL will close the
ciaar factory
at Montreal and transfer production to the main
Klontreal
plant, thus saving about 360 people ard $7 million
annually.
Later the Quebec factory may similarly be closed.
The Food
Division is doing well and improving and the
profits prospects
are excellent. All other activities are also
growing and doing
well. Imasco needs one more principal diversified
activity
and a team is being set up to consider this.
Mr. Slack queried whether a Canadian could not be
employed at Millbank. Mr. Macadam enumerated some
of the
difficulties but agreed that it was worth
considering.
(Mr. Macadam Mr. Slack
7/4 ORGANISATION' C2-iARTS
The proposed revised Sheet 5 was approved and it
was agreed
that the Secretary should circulate it.
(Mr. Pearson
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7/5 MILLBANK CO~,1MITTEES
Mr. Haine.,1 note ol 28zh June -ill be cr-nsidered
at the next
meetine.
7/6 RESPOIN-S IB ILI TIES OF TOBACCO DIVISIO.N
1 ) Various chan2es -ere agreed to the Secretary's
draft.
The current version is attached to these minutes.
The
final version will require CPC approval.
(2) Mr. Calvert's note of 6th July %,i11 be
considered at
the next meetin2.
,/7 U.K. OPERATIONS
Mr. Short's note of 27-h June %vas considered and
the following
points -ere made:-
(1) the aim of 5% of the U.K. cigarette market in
5 years
was too high;
(2) the aim of 15% return on capital employed by
year 5
should be 25'/o before tax;
(3) Mr. Symons would like clarificatic, of the
work to
be carried out by IManagement Services;
(4) Mr. E.A.B. Tims (or B. Rowles) must work under
the
aegis of Mr. A. Dale;
(5) -he investiga:inz: team siiould i--:ea'ly
include the
man who will be in charge of tne U.K. operation .
out
iiis selection partly depends on the team's
recommenda-
,Lions and the decisions taken. J7 ~as noted that
the
team does not at present include a.,yone ~ho has
been
in charge of an cperatiniz comp_=ny.
It was agree6 to accept the note as a basis for an
ur2ent study of the U..K. marke:, to 2re:;Ere
production and
marketing plans othe-r than those i.-ivz:1ving
Imperial, and to
collect all the neces-sary facts and =repx-re
recommendations
on which decisions can be made.
(Mr. Sic-r Mr. Slack
Mr. Symons
Hr. Doug-iasl,
7/8 F I NANC I.A.L CONTROLS
Consideration was given to minute 6/7 of 3rd July
and the
Secretary's subsequent note.
It was agreed that:-
(1) the following figures will apply as limits of
territorial
directors' authority for capital projects until
capital
expenditure budgets are approved, and after that
time as
their limits in cases of necessary expenditure
beyond
the budgets:-
B. & W.
Germany E1,000,000
Brazil CD
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Mex i co
Nigeria
South Africa
Argentine
Hongkong
India
Ma lays i a
Pakistan
Indonesia
Vietnam
Kenya
Switzerland
Cigar Group,Europe
Benelux
I.E.D.
Chile
Venezuela
Export Leaf
All others
E200,000
E100,000
(2) Such expenditure above these limits must be
approved by
this Board up to 12 million.
(3) Such expenditure above 12 million will be
referred by
t'-is Board to the CPC.
(4) These figures will need CPC approval.
CIGARETTE ISSUE - PERSOI%~= DEPARTMENT
Reference: Mr. Ra,,Iinson's note of 3rd Julv.
It was agreed that the 650 cigarettes weekly
previously
received by Mr. Brolly should no%m be received by
Mr.D.S. Dunbar
for distribution at his discretion to members of
Personnel
Department who do not receive a weekly allowance
of cigarettes.
(Mr. Rawlinson Mr. Dunbar)
Mr. Bo-ra
(ilo BRAZIL TOBACCO DIVISION BO:~.RD
Mr. Leaat ' s note of 3rd July was rejected and
Mr. Husbands
will submit a new note for the next meeting.
(Mr. Husbands
1/11 BIO-DEGRADABLE FILTERS
Reference: Minute 15 of the New Products Committee
dated
14 th June 1973.
It was noted that pressure will be maintained on
suppliers
through R. & D. to develop filters which are
bio-degradable
at a faster rate, but Associated Companies should
also press
their suppliers similarly.
(All members Dr.Green
Mr. Liddle)
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7/i2 IMASCO BOARD
'~e fe i
-ence: Mr. Macadam's note of 6th July.
I
It was noted that Mr. John H. Coleman had been
appointed
a non-executive director of Imasco and it was
a==-reed to
recommend to the CPC that this appointment be
approved.
(CPC
7/13 PAKIST.A_N - Akora Khattack Proiect
Reference: Mr. Spurgeon's note of 9th July.
It was agreed to establish a factory at Ak-ora
Khattak at a
total cost of 1388,000 and that, subject to
Exchanae Control
approval, BAT should "gift" PTC machinery up to
;E90,000 to
be repaid as soon as possible by increased
dividends and leaf
selling commission. It was also agreed that the
other share-
holders (Tobacco Investments and Carreras) should
be requested
to bear their due proportion of the cost.
(Mr. McCormick Mr.SDUrgeon)
I/i_i CAPITAL PROJECTS - Proforma
Mr. Symons will draw up a proforma of informatic;n
to be
supplied to this Board when seeking approval of
capital
projects.
(.Mr. Symon-s
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