BAT to invest pounds 133m in Uzbekistan cigarette factory

BAT Industries, the tobacco group, will invest more than pounds 133m in Uzbekistan through a deal that will give it a majority stake in the former Soviet republic's tobacco industry, writes Paul Durman.

This is BAT's most significant move so far into the huge market of the former Soviet Union. Its deal with Uzbekistan follows a tie- up between Philip Morris, the maker of Marlboro, and Kazakhstan, the republic to the north of Uzbekistan.

Much of BAT's money will be spent modernising Uzbekistan's existing cigarette factory in Tashkent and building a new one near Samarkand. The company will also invest in leaf processing plants in Samarkand and Urgut, and provide training and advice to local tobacco farmers.

The British company will take an initial 51 per cent stake in Uz Tobacco, a new company that will acquire the assets of the Uzbek tobacco industry. BAT's interest will rise to more than 90 per cent over the course of the five-year investment programme.

In the US, Brown & Williamson, a BAT subsidiary, said it had won a court order for the return of documents it says were stolen from its files. Henry Waxman, a California congressman who reportedly obtained the papers from a para-legal who once worked for the firm, used the papers recently as evidence the company was aware 30 years ago that nicotine was addictive.