BAT Bangladesh Shuts Dhaka Factory, Moves with Tk 297 Cr Investment

British American Tobacco Bangladesh (BAT Bangladesh) has decided to invest Tk 297 crore in its factory located in Savar.

Official Announcement Made on Stock Exchange Website

This decision was announced in a statement published on the stock exchange’s website. According to the announcement, the company’s Board of Directors approved the investment to expand production capacity at the Savar factory after shutting down its Dhaka factory.

The approval was given at a board meeting held on 25 June.

Funding Through Bank Loan and Company’s Own Resources

BAT Bangladesh will fund this investment through a bank loan, based on its own financial resources and cash flow.

Why the Dhaka Factory Is Closing

BAT Bangladesh is vacating its main office and factory at Mohakhali DOHS in Dhaka because the Supreme Court rejected their appeal regarding a land lease renewal.

The company had been operating the factory on land leased from the Dhaka Cantonment Board, but the lease renewal was denied. BAT Bangladesh appealed the decision, but the Appellate Division led by Chief Justice Syed Refat Ahmed rejected the appeal on 29 May.

Earlier, on 12 December last year, the High Court also rejected BAT Bangladesh’s petition challenging the board’s lease decision.

Lease Agreement History

According to BAT Bangladesh’s 2024 annual report:

The company had leased land from the Dhaka Cantonment Board since 1964.
Each lease was for 30 years, with the possibility of renewal for up to 90 years.
BAT Bangladesh applied for another 30-year renewal, but it was denied, leading to a legal battle.

Environmental Concerns Over Factory Location

Environmental groups had long protested the Mohakhali factory, raising concerns over pollution. They organized human chains and protests, demanding its removal from a residential area.

BAT Bangladesh’s Current Operations

Right now, BAT Bangladesh operates:

Three factories: located in Mohakhali, Savar, and Manikganj
A leaf processing plant (Green Leaf Threshing Plant) in Kushtia

A Brief History of BAT Bangladesh

The first factory was built in Faujdarhat, Chattogram in 1949, when the region was part of East Pakistan.
The second factory was set up in Mohakhali, Dhaka in 1965 by the Pakistan Tobacco Company.
After Bangladesh’s independence, the company was renamed Bangladesh Tobacco Company Limited.
In 1998, it changed its name to British American Tobacco Bangladesh to align with its global group.
BAT Bangladesh was listed on the stock market in 1977.