Power cuts hit British American Tobacco South African output

Pulse Staff 12:25 - 07 May 2015

A man walks past the British American Tobacco offices in London, in a file. REUTERS/Luke MacGregor

HEIDELBERG, South Africa (Reuters) - British American Tobacco (BAT), the world's No.2 cigarette maker, is losing as much as 10 percent of its South African output due to power cuts, a senior official said on Thursday.

South Africa is in the middle of its worst electricity crisis since 2008 and its citizens and businesses suffer frequent controlled blackouts, which state utility Eskom implements to prevent the grid from collapsing.

Arturo Rodriguez, head of the BAT South African unit, said despite having back up diesel-powered generators to run the factory, the unpredictable timing and duration of the outages has resulted in between 5 and 10 percent output losses at the Heidelberg plant.

Rodriguez was speaking to reporters at the site tour of the plant, BAT's eighth biggest in the world, in Heidelberg - a town about 50 km south-east of Johannesburg.

He also said BAT was in talks with power utility Eskom about generating its own solar farm energy to power the factory that produces 27 billion sticks of cigarettes per year.