Egyptian firm the Eastern Tobacco Company today signed a memorandum of understanding with government to venture into cigarette manufacturing in the country.
Malawi President Peter Mutharika gave the nod to the deal when he met owners of the company at State House in Lilongwe.
Mutharika commended the company for its interest to invest in the country.
“Malawi is the largest producer of tobacco, however for years there have been little improvements in terms of value addition. Today I am pleased to sign the memorandum of understanding between the Malawi Government and the Eastern Tobacco Company of Egypt which will be involved in cigarette making,” Mutharika said.
“These cigarettes will be sold either within or outside the country and this will make the country gain more foreign currency,” he added.
Mutharika said tobacco is one of the nation’s largest sources of income as it contributes about 60 percent of the country’s economy.
He said apart from exporting unfinished tobacco, the crop could bring in more foreign exchange if we add value and processing were done here in Malawi.
The President said producing cigarettes in Malawi is more profitable for the country.
Mutharika has assured the investors of their safety, saying government would provide the necessary security to their investments.
“The two things that investors get worried about are fiscal and investment security, but as Malawi Government we will make sure that we provide maximum security,” the President said.
Eastern Tobacco Company Chairperson, Nabila Mohsen hailed Mutharika for allowing them to invest in Malawi.
“Malawi is very famous in as far as tobacco production is concerned, it produces quality leaf and in large quantities,” Mohsen said.
‘’We therefore believe that there will be more and more benefits for both of us,” he added.
Mohsen said Eastern Tobacco Company is primarily engaged in the manufacture and trade of tobacco products and accessories, agricultural marketing and expert trading as well as real estate services.
Malawi is the 12th largest producer of tobacco leaf and the 7th largest global supporter of tobacco. As of 2010, Malawi was the world’s leading producer of burley leaf tobacco.
With the decline of tobacco farms in the West, interest in Malawi’s low-grade, high-nicotine tobacco has increased. Today, Malawian tobacco is found in blends of most cigarettes smoked in industrialized nations.
Eastern Tobacco Company is expected to have a ground breaking ceremony marking the commencement of the company in the country on Friday at Kanengo industrial area in Lilongwe.