As the Chief Operating Officer of British American Tobacco (BAT), I have the regular opportunity to engage with our team in Pakistan and am consistently impressed by the resilience, ambition, and determination of its people.
BAT’s connection to Pakistan, through its local subsidiary Pakistan Tobacco Company (PTC), dates back to the country’s independence. As the first and one of the largest multinationals operating in Pakistan, PTC has always played a pivotal role in generating business value and nurturing local talent.
It has also consistently been recognised by the Government of Pakistan as one of the highest taxpayers. Since 2021, PTC’s sales have generated over PKR 600 billion (USD 2.17 billion) in tax contributions to the national exchequer.
In 2024 alone, PTC’s business delivered PKR 258 billion (USD 930 million) in Federal Excise Duty, Sales Tax and other taxes, contributing a significant source of revenue for the country.
Following the launch of the ‘Made in Pakistan’ initiative, which is aimed at positioning Pakistan as a key manufacturing and export hub, PTC’s Jhelum factory has become an export hub for the BAT Group, meeting the highest quality standards across the BAT network and setting a benchmark for operational excellence. In the last five years, PTC has exported cigarettes and tobacco worth USD 150 million to partners and BAT subsidiaries in different countries across the globe.
In line withits vision to create A Better Tomorrow™ by building a Smokeless World, BAT invested USD 40 million to establish a cutting-edge facility in Jhelum in 2020, to manufacture oral nicotine pouches. These pouches offer a compelling alternative for adult smokers, who would otherwise continue to smoke, to switch completely to products which have 99% less toxicants as compared to cigarettes*^. The facility has been exporting these products since 2024, reaching markets like Japan, Peru, and France, with more markets set to be added in 2025.
In 2021, BAT also embarked on the journey to establish its Global Business Services (GBS) hub in Lahore. The Pakistan hub has created more than 500 jobs locally and is providing digital business solutions and services to BAT companies in more than 50 countries including Japan, UAE, Malaysia, Australia, Turkey, and many others. The offered services range from finance, marketing, supply chain, data analytics to insights, to name a few.
The Hub has generated over USD 22 million in foreign exchange in the last two years. BAT GBS Pakistan serves as a successful model for other multinational companies to tap into the country’s digital potential, showcasing it as a viable destination for setting up global business services.
BAT’s legacy in Pakistan extends beyond PTC’s economic contributions. Consistently ranked as a Top Employer, it creates quality jobs, develops talent, and fosters innovation. It also serves as a talent export hub for BAT globally.
Over 80 individuals from PTC currently hold significant roles in different BAT group companies across the world, including two individuals on the BAT Management Board. This reflects the capability of Pakistan’s people and underscores the importance of nurturing talent to drive economic transformation.
At BAT, sustainability is integral to shaping our future. By 2030, we aim to achieve a 50% reduction in our Scope 1, 2 & 3 emissions and to be Net Zero across our value chain by 2050.
In Pakistan, PTC drives this vision through initiatives like hosting BAT’s largest on-site solar park generating 5.3 MW of clean energy, conserving 44 hectares of biodiversity-rich land, and planting over 160 million saplings through its afforestation program since 1981. These efforts, along with the support for rural development, crop diversification and sustainability training, underline our commitment to environmental excellence and societal impact.
Despite these transformative strides, the sustainability of legitimate tobacco industry players is severely undermined by rampant illicit trade, which includes both locally manufactured tax-evaded cigarettes and smuggled products.
According to research conducted by Pakistan’s leading academic institution, The National University of Sciences and Technology (NUST), illicit trade accounts for over 50% of the total industry in Pakistan, causing an annual loss of more than PKR 300 billion to the national exchequer – revenue that could otherwise support critical public services such as healthcare, education, and infrastructure development.
PTC contributes over 80% of the country’s total tobacco tax revenue, despite operating in a highly challenging market heavily impacted by non-compliant players. This disparity underscores the urgent need to combat illicit trade, as it creates serious sustainability challenges for legitimate businesses and government revenues.
As part of Pakistan’s National Economic Transformation Plan 2024-29, the Ministry of Planning, Development, and Special Initiatives has spearheaded the ‘Uraan Pakistan’ Project. This initiative aims to rejuvenate the economy, promote sustainable development, and drive inclusive growth. The initiative envisions transforming the country into a USD 3 trillion economy by 2047.
In my view, the success of this initiative relies on prioritizing a level playing field for legitimate businesses, critical for achieving meaningful transformation. Tackling challenges such as illicit trade and regulatory inefficiencies will be crucial in realising this bold vision and unlocking Pakistan’s full economic potential.
A stable framework for legitimate businesses, combined with a focus on fostering exports and attracting investments, will pave the way for sustained prosperity. BAT remains committed to Pakistan through this journey and will continue to play a positive role in building a stronger economy and a promising future.
Johan Vandermeulen is the Chief Operating Officer at the BAT Group.
*Based on the weight of evidence and assuming a complete switch from cigarette smoking. These products are not risk free and are addictive.
^ On average, in comparison with smoke from a scientific standard reference cigarette (approximately 9 mg tar).
Copyright Business Recorder, 2025
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