Milorad Krstikeski, General Manager Of British American Tobacco (BAT) For Serbia And Montenegro

Innovation Triggers Progress

Despite the pandemic, BAT continued its investments, the applying of world quality standards and investments in training and developing its personnel. Thanks to employees at all levels, this company managed to overcome the challenges and achieve expected business results

The new Glo Hyper model, which BAT presented recently, has been a large and revolutionary project in the tobacco industry. The company is very satisfied with the reactions from the market and plans to continue investing in innovations in the future.

Despite the coronavirus crisis, you managed to save all jobs without state aid, while you additionally continued to invest and expand production capacity. How did you do it?

People are most certainly the basis of our success, under normal conditions and during times of crisis. We are very proud that we have highly qualified staff in our ranks that our company can rely on, without whom it would not be possible to survive or progress on the dynamic modern market. We believe that our success during the pandemic is the result of consistency in implementing a sensible business strategy.

We are particularly proud of the fact that we managed to save every job without the help of the state, thus contributing to the Serbian economy, while at the same time we continued investing in the production and development of our brands.

Your factory in Vranje is known as one of the BAT group’s most successful plants. What plans do you have for further investments and the expansion of production capacities? Are you considering increasing exports?

That’s right, our factory has been awarded the Global Quality Excellence Award, thanks to the reputation it has built in terms of quality and standards. A small number of factories can boast of having received this recognition. We also commemorated 135 years of the factory in Vranje last year, and the recognition you mentioned represents the crowning glory of this jubilee. During 2002, we celebrated 17 years of successful business in Serbia, during which we achieved significant results on the Serbian market, especially in the form of investments, the creation of jobs and launching new products.

We’ve marked seven years without any work injuries at our plant in Vranje, which is, for me personally, one of the most important accomplishments of the company

Thanks to all of the aforementioned, BAT was able to give back to the community and support the country’s economy. I would like to mention in particular that we also marked seven years without any injuries at work, which is, for me personally, one of the most important accomplishments of the company.

Our primary focus in the period ahead will be on the transformation of the tobacco industry and the further development and promotion of innovative products with potentially reduced risk, as well as export growth.

Could it be said that you are one of the initiators of the transformation of the tobacco industry? What do you think about the estimate that half of all smokers will switch to new generation products by 2050?

We live in an era of great and fast changes in all industries. Innovation in one area necessarily triggers progress in various fields, and the tobacco industry is no exception.

Digitalisation, new technologies, scientific discoveries and the growth of quality of life have led to a change in consumer expectations. Accordingly, BAT announced a new evolved corporate strategy and its intention to build A Better Tomorrow, by reducing the health impact of the tobacco business by offering a greater choice of enjoyable and less risky products. Tobacco heating products, vapour and modern oral nicotine products are only a small part of our reduced-risk alternatives portfolio. We believe that consumers will surely start changing their habits as the years go by and will, as a result, turn towards new generation products. Awareness of the importance of healthy lifestyles is developing rapidly and we are there to support it.

BAT has been working on sustainable development for more than two decades. What goals have you set for yourself for the next 20 years and what activities are you currently carrying out in that field?

In terms of business sustainability, our company was rated as the best company in the food and tobacco sector and the third best company in the global FTSE 100 index of the London Stock Exchange. The contribution that our company makes through its environmental and social policy, and through corporate governance (ESG report), received 91 of a maximum of 100 points.

Through the corporate strategy of building A Better Tomorrow for all stakeholders, which includes reducing the health impact of its business, BAT has raised the standards of sustainable operations significantly. One of our current ambitious targets is to achieve carbon neutrality across our entire chain by 2050, as well as the 100% use of electricity from renewables by 2030. I am pleased to say that BAT achieved a 30.9% reduction in emissions from its operations in 2020 alone. We have also been proclaimed a 2021 Climate Leader by the Financial Times, in its inaugural European ranking. Minimising impacts on the environment, increasing climate change resilience and protecting the natural resources society depends on are key parts of BAT’s ESG strategy.

What are the reactions to the new Glo Hyper model, which was designed and developed in the UK? Is that your answer to consumers looking for new tobacco and nicotine products?

Modern consumers crave innovation, which provides us with both motivation to progress and responsibility to fulfil their needs in the best possible way. Glo has been present in Serbia since 2018 and quickly won over consumers. The reactions to the product were positive, considering that many years of scientific research instil a dose of trust. The new Glo Hyper model, which we presented recently, has been a large and revolutionary project in the tobacco industry. We are very satisfied with the reactions from the market and plan to continue investing in innovations in the future.

Social responsibility has always been an important segment of the operations of your company, which strives to be a good partner to the local community, especially during this time of the pandemic. What are you particularly proud of in terms of CSR?

Recent research around the world has shown that a large percentage of people today expect companies to engage socially and help the local community. Last year’s outbreak of the COVID-19 pandemic further highlighted the importance of socially responsible operations to the community.

When it comes to BAT, I can say that we are proud of the fact that we were ready to participate in the preservation and recovery of the community during the global crisis, and to provide assistance where it was most needed, not only as a company, but also as individuals. Our employees participated actively in all the company’s actions on a voluntary basis, in order to show through their personal example that we can rely on each other in times of crisis. As for the company’s activities, one of the priorities was to support the health and social system of Serbia. We paid special attention to local institutions in Vranje, as the community in which we operate, through the help of organisations actively fighting to combat the coronavirus, such as the Red Cross and the City Emergency Headquarters. Last year’s crisis was just an additional source of motivation for us to continue supporting the local community and society in general.

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