BAT restructures as e-cigarettes go mainstream

[August 31, 2017]  By Justin George Varghese and Martinne Geller

(Reuters) - British American Tobacco said on Thursday it has reorganized its regional management structure following the acquisition of Reynolds American to bring its vaping and heated tobacco products into the main business.

"Now that we have built a successful NGP (next generation products) business which is poised for substantial growth, we will be fully integrating NGP to leverage the scale and expertise of the whole group to drive growth in an area that is fast becoming a key part of our mainstream business," BAT said in a statement.

Kingsley Wheaton, the managing director of NGP will manage this integration process, the company said.

BATS has been looking to double the number of countries where it sells vaping products this year and again in 2018, as it chases rivals Philip Morris International to grab a share of a growing market.

BAT and Philip Morris were the first of the big tobacco firms to invest in cigarette alternatives a few year back, as growing health consciousness reduces traditional smoking.

Philip Morris is ahead of BAT in the market for tobacco-based vaping devices, which some analysts think will be more popular than traditional e-cigarettes with regular smokers.

Last month BAT completed the acquisition of Reynolds American in a deal valued at over $49 billion which it said would help boost its position in the small but growing market for vaping and electronic cigarettes.

BAT said earlier this year it had the biggest vaping business in the world outside of the United States and intended to take Reynold's own NGP portfolio, led by vaping brand Vuse, into its international markets.

 People walk past the British American Tobacco offices in London, Britain October 21, 2016. REUTERS/Stefan Wermuth/File Photo

Also last month the U.S. Food and Drug Administration (FDA) proposed cutting nicotine in cigarettes to "non-addictive" levels in a major regulatory shift designed to move smokers toward potentially less harmful e-cigarettes.

BAT, which in January quit plans to market a nicotine inhaler called Voke, plans to double the number of markets where it offers cigarette alternatives this year, and again next year.

Under the management reorganization announced on Thursday BAT said it has appointed Jack Bowles, hitherto director for the Asia-Pacific region, to the newly created role of chief operating officer for the international business, excluding the United States.

The company said it also intended to "simplify" the regional management structure to add three regions, Americas and Sub-Saharan Africa, Europe and North Africa, Asia-Pacific and Middle East.

Ricardo Oberlander has been appointed regional director for the Americas and Sub-Saharan Africa and Tadeu Marroco has been made head of Europe and North Africa, while Johan Vandermeulen becomes the director for the new Asia-Pacific and Middle East region.

(Reporting By Justin George Varghese in Bengaluru and Martinne Geller in London; Editing by Greg Mahlich)

[© 2017 Thomson Reuters. All rights reserved.]

Copyright 2017 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.