BAT's Lankan unit set to lose dominant position amid levies

Colombo

BRITISH American Tobacco plc's unit in Sri Lanka says it's poised to lose its dominant position in the market to leaf-rolled cigars made by small local rivals.

Ceylon Tobacco Co's profit margin will continue to narrow as an increase in levies on cigarettes prompts some smokers to switch to the cheaper alternative, said Emma Ridley, finance director of the Colombo-based BAT unit. The company's operating profit margin, the highest among listed Asian peers, narrowed to 64 per cent in 2016 from 67 per cent a year earlier in a cigarette market estimated at about US$1.1 billion.