Ceylon Tobacco Company PLC (CTC)

Ceylon Tobacco Company (CTC) Home Page as of 2017 July

Background

Ceylon Tobacco Company PLC (CTC) holds the monopoly of cigarette manufacturing and sales in Sri Lanka. It is a subsidiary of British American Tobacco (BAT), which owned 84.13% of the shares in 2017. Even though BAT started its operations in Sri Lanka in 1904-1911 period, CTC was only established as a company in 1932.

CTC is engaged in the complete manufacturing process of cigarettes in Sri Lanka, from tobacco cultivation to cigarette production. CTC owns 99% of the market with the remaining 1% comprising of imported cigarettes. Almost 100% of the tobacco used for cigarette manufacturing in Sri Lanka is cultivated in the country, which accounted for approximately 3000 tons of tobacco in 2014. CTC also exports its manufactured cigarettes, which contributes approximately 1% to its overall annual revenue. Headquartered in Colombo, CTC operates via two factories; the Colombo Factory and the Green Leaf Threshing Plant in Kandy.

The CTC cigarette brands include John Player Gold Leaf (JPGL), Dunhill, Benson & Hedges and Capstan.

Directors & Employees: Past and Present

CTC is managed by a Board of Directors and an Executive Committee. In 2018, Board of Directors, headed by the Chairman, consisted of six Directors, of which 4 were Non-Executive Directors. The Executive Committee headed by the Chief Executive Officer also had seven members.

William Francis Pegel was appointed the Chairman of CTC since 2019 and Nedal L. Salem as the Chief Executive Officer/Managing Director since 2019. A complete list of CTC's Board of Directors and the Executive Committee members can be found on the CTC website.

In 2018, the number of permanent employees of CTC was 270, with an employee turnover rate of 7.9%.

Details on past or present CTC employees and Directors listed below can be found in the respective TobaccoUnmasked pages:

Emma Ridley | Dinesh Weerakkody | Denis Perera | Ken Balendra | Lakmali Nanayakkara | Michael Koest | Ramesh Nanayakkara | Rukshan Gunatilaka | Stanley Wanigasekara | Susantha Ratnayake

Subsidiaries

Up to 2017, CTC owned the following subsidiaries:

• Advent International
• CTC Briquettes Limited
• CTC Eagle
• CTC Exports Limited
• CTC Foliage Limited
• CTC Leaf Exports Limited
• Outreach Projects (Guarantee) Limited
• CTC Services Limited

Investors

As in 31st December 2018, the number of shareholders of the CTC were 3270. It was a reduction by 119 from the number in 2017. Following were the 20 largest shareholders (in the descending order):

British American Tobacco International Holdings | Philip Morris Brand SARL | Pershing LLC S/A Averbach Grauson & Co. | SSBT-BMO Investments 11 (Ireland) Public Limited Company | Northen Trust Company S/A - Fundsmith Emerging Equities Trust PLC | RBC Investor Services Bank | SSBT-AL MEHWAR COMMERCIAL INVESTMENTS L.L.C | HSBC INTL NOM LTD-BBH-Matthews Emerging Asia Fund | HSBC INTL NOM LTD-JPMCB-Long Term Economic Investment Fund | Mrs Jasbinderjit Kaur Piara Singh | HSBC INTL NOM Ltd - SSBT-BMO-LGM Frontier Markets Equity Fund | Miss Neesha Harnam | HSBC INTL NOM LTD-SSBT Frank Russel Trust Company | HSBC INTL NOM Ltd - SSBT-Deutsche Bank AG Singapore | Mr Prabhash Subasinghe | AYENKA HOLDINGS PRIVATE LIMITED | PICTET and CIE (Europe) SA S/A Lloyd George Indian Ocean Master Fund | Harnam Holdings SDN BHD | Mellon Bank N.A-Eaton Vance Trust Co.Collective Inv. | Bank of Ceylon No 1 Account | HSBC INTL NOM LTD-State Street London | Nortthen Trust Company S/A - Coupland Cardiff Funds PLC | HSBC INTL NOM LTD-JPMCB-Coronation Global Frontiers Master fund | HSBC INTL NOM LTD-JPMCB-New Emerging Markets.

They collectively owned 96.69% of shares. Except for Bank of Ceylon No 1 Account and Mr. Prabash Subasinghe, all the others were foreign investors.

Affiliations

Individuals and institutions with affiliations to CTC are detailed in the pages in following categories:

• Commissioned or Sponsored – Individuals or institutions commissioned or sponsored by CTC
• Consultants – Individuals or institutions with a history of provision of consultancy services to CTC
• Indirect Links – Individuals or institutions sponsored or commissioned by institutions directly linked to CTC
• Institutions with Mutual Associates - Institutions in which Directors/employees of CTC are Directors/employees/members
• Institutions Governed by Tobacco Industry – Institutions in which executive positions are assigned to CTC employees or directors as a representative of CTC

Activities

CTC’s activities in Sri Lanka are detailed in the pages in following catagories:

• Corporate Social Investments - activities themed as ‘Corporate Social Responsibility’ and sponsorships of social events/activities by the CTC or its employees (using the company name and/or the title)
• Influencing Policy – attempts to influence policies and litigations against the government
• Marketing and Promotions - activities to promote products, brands or smoking habit, marketing strategies and activities to promote the image of the company
• Tobacco Cultivation – influences and interventions on tobacco farming and famers
• Tobacco Tax and Pricing Related Issues – responses to tobacco tax policies and increase of cigarette price
• Liaising with Government Officials – collaborating with government officials to influence policies or implement CTC activities
• Involvement in Illicit Tobacco Trade – influences and interventions related to tobacco smuggling and illicit tobacco trade
• Tobacco Industry Arguments – arguments against tobacco control measures and the science behind them
• Tobacco Industry Responses – responses for accusations/queries from the authorities/scientists/public or for tobacco control policies/actions

2018 Highlights

Community Protests at the AGM

In 2018 April a protest was held in front of the CTC headquarters at the day of the Annual General Meeting (AGM), commemorating, with an all-faith service, the Sri Lankans who lost their lives due to cigarette smoking (Image 2). The protesters appealed to the investors to stop investing in a business that kills its consumers (Image 3). A similar protest was reported in 2016.

Image 02: A protest at the CTC headquarters in its AGM held on April 2018

Image 03: Ada newspaper reporting the protest

CTC Punished for Delaying Court Procedures

In June 2018, Supreme Court of Sri Lanka ordered CTC to pay a plaintiff, who had filed a case for damages against them, an amount of LKR 400,000 (USD 2,500) as legal costs for deliberately delaying the court case at a lower court for 12 years. The court case in question was initiated by a widow of a smoker seeking compensation for the lung cancer related death of her husband. Please see our page Ceylon Tobacco Sued for a Smoker’s Death for more details.

Tobacco Unmasked Resources

• British American Tobacco (BAT)
• Susantha Ratnayake
• Michael Koest

Relevant Link

Ceylon Tobacacco Company’s website