FEE
Ha. Preview 1992-19"
A CPC meeting to discuss the Preview of the jATCo. Plans for 1992-1996 was
hold on 29th October 1991.
Present : Sir Patrick Sheehy, Mr. B. P. Garraway, Mr. M. F. Broughton,
Mr. B. D. Irmley
Dr. R. Salter was in attendance.
1. 1991 : Introducing the Preview, Mr. Bromley noted that the current
estimate for 1991 trading profit was around ES million below budget.
This included provisions for factory closures in Pakistan and
Bangladesh, reduced profits in Zaire, a negative variance and
provisions for redundancies in Australia, and a negative variance in
Malaysia.
2. Argentina : It also included E12 million provisions for the loner
Salgado tax credits in Argentina. some of which might be written back
in the final accounts for 1991. It was noted that the Koner Salgado
negotiations were still proccediug. 4r. Irmaloy would report to the
CPC an the latest situation and recommended negotiating stance early
in November.
3. 1"2 : It was noted chat the trading profits for 1992 shown in the
Preview included L13 million of profits added to the individual
company forecasts by SAM. The CPC stressed that the final budgets
should include these as firm figures. SAM. should also aim to find
further improvements of C16.5 million to bring the budget for l"2 up
to the level of the forecast for the year included in the 1991-1995
Plan, indicating the longer-term implications of the action required
to achieve this level of improvement.
4. Price Increases : The Chairiian emphasised the need to give further
consideration to the potential for increasing prices, accepting that
am& volume and market share might need to be sacrificed in the
interests of achieving higher levels of profitability, which would
then provide a better base for longer-torm. expansion.
5. Varkst Strac- F : It was noted that the growch of transit trade
was an increasing problem in several of 3ATC*. I most important
markets and the development of appropriate strategies yes a priority
concern within BATC*.
6. The Chairman accepted that there was a trend for transit trade to
increase but suggested that rather than merely aiming to gain a higher
share of this trade, SAM. should be actively involved with
Governments in discussing changes to excise regions, including duties
on imported leaf, which would enable locally established companies to
compeca move strongly against duty-froo imports.
7. 'The current clinaca of opinion meamt the Governments Were 100CO
sensitive to the way in which they dealt with foreign investors and it
should be a particularly favourabl* time to enter into positive
negotiations, showing the benefits to the covernmene. as well as to C)
the company, of less r2stric:ive tax regimes.
Cb.
BAT Industries document for Province of British Columbia 23 April 1999