BAT Kenya is targeting to source at least 70 percent of its tobacco leaf from the domestic market this year as the company’s outgoing leadership plans to place a tight lid on the manufacturer’s costs and boost profitability amidst an environment of escalating costs.
In 2025, the manufacturer sourced 60 percent of leaf from the domestic market, registering an increase from 55 percent in 2024, a move the top leadership says played a key role in the 14.3 percent reduction in operating expenses to Sh15.7 billion.
Outgoing managing director Crispin Achola says that having re-introduced the sale of modern oral nicotine pouches in the second half of 2025 and increased net earnings by 17 percent, extracting efficiency will shape the agenda for the tail end of his tenure.
“My mandate when I took over this company five and a half years ago focused on a number of issues. The first was reintroducing our new category products sustainably and we have now realised that," says Mr Achola.
"The second agenda was driving solid commercial results. With the work done over the last five years, the business is on a sustainable footing. We have strong earnings, cash flows and a debt-free balance sheet."
The outgoing finance director Philemon Kipkemoi says that increasing domestic sourcing of leaf enables BAT Kenya to serve the dual mandate of not only protecting the firm’s margins but also boosting earnings of farmers it works with.
“A significant proportion of our raw material is leaf. For every kilogramme of tobacco we use that is sourced locally we save about two Sterling Pounds," says Mr Kipkemoi.
"The shift to more local sourcing just translates to more money in the farmers’ pocket," he says.
BAT Kenya announced the exits of Mr Achola and Mr Kipkemoi effective June 15 and March 31 respectively.
Taking over as managing director is Sidney Wafula who is currently the finance director for BAT Sub-Saharan Africa while Catherine Chepkong’a is taking over the role of finance director.
The exit of the two executives comes on the back of a bumper dividend for 2025 which saw the company announce a 40 percent year-on-year increase in the payout to shareholders to Sh70 per share.
“BAT is undergoing a reorganization and the Kenyan business will now become a stand-alone unit," said Mr Achola.
"Under myself and Philemon’s reign, we have been overseeing Kenya, the wider East Africa, Southern Africa and the Horn region including the Indian Ocean islands. The organization has now opted to have the team that is incoming focus solely on Kenya which is a good decision."
Mr Achola’s exit from the company in June 2026 is designed to allow him to navigate the business through the next Annual General Meeting and handover to the incoming leadership.
