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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-

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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.