Most Profitable Asia Cigarette Maker Faces Cheap Cigar Flood
- Ceylon Tobacco says tax increases to narrow profit margins
- Smokers seen switching to leaf-rolled products like beedis
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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 percent in 2016 from 67 percent a year earlier in a cigarette market estimated at about $1.1 billion.