THESE unprecedented times have seen many businesses navigating through ever-changing commercial landscapes.
From flexible working arrangements to virtual meetings, the pandemic has resulted in many changes in the workforce.
We speak with Ignacio Ballester, finance director of British American Tobacco Malaysia Bhd (BAT Malaysia) about how the company has managed to pivot through challenges posed by the spread of Covid-19.
"The pandemic has impacted all of us in different ways," Ballester said. "For the first time, all employees, including my team, worked from home. However, we were able to operate effectively as our Information and Digital Technology team ensured that the organisation was able to connect via Microsoft Teams through an upgraded bandwidth network."
It was also critical for the organisation to safeguard their employees' physical and mental health.
BAT Malaysia created "We Care," a digital application for employees, in line with the company's objective to digitalise the organisation.
Employees had access to a variety of health-related services, including psychologists, dieticians and fitness instructors, through the app.
While Ballester stated that there was some disruption to BAT's supply chain throughout the pandemic, it had a minimal impact on their duty-free business.
"We are cognisant of the landscape and are well prepared to manage the situation by leveraging on our business partners' operations to minimise impact throughout the supply chain, extending credit to retail customers and maintaining an additional five weeks' worth of inventories to ensure our retailers are adequately supplied," he said.
MITIGATION MEASURES
In order to mitigate the financial impact of the pandemic and worldwide lockdowns, various targeted measures were put in place to soften the blow.
Working with alternative suppliers, utilising technology and tapping into their staff's inventive attitude allowed BAT to maintain excellent service standards throughout the supply chain.
BAT Malaysia also successfully introduced a new brand, KYO, to strengthen its portfolio in the Value-for-Money (VFM) segment in response to consumer downtrading caused by excise and pandemic-related affordability challenges.
The financial performance of BAT Malaysia was also influenced by the strength of their brands.
According to Ballester, the fast and bold execution of KYO has seen a positive share of the market since its launch in mid-2020.
For the first half of FY2021, BAT Malaysia's share in the VFM segment recorded a 4.4 percentage points growth compared with the same period last year.
INDUSTRY TRENDS
On the topic of industry trends within the past two years, Ballester notes that the tobacco black market continues to impact legal players, although measures implemented during Budget 2021 have affected the sales of illegal cigarettes.
He cited that the issue is still at a crisis point, with over 57.9 per cent of the tobacco market dominated by criminal syndicates.
To effectively combat the tobacco black market, enforcement must be supplemented by measures that address customer affordability concerns.
There must be ways to address the enormous price disparity between expensive legal and low-cost black market goods.
"Vaping is growing exponentially in Malaysia," he continued. "According to official statistics from the Ministry of Health, there are over one million vape users. These figures are expected to grow in tandem with global trends."
According to a survey conducted by a local vaping industry body, 88 per cent of Malaysian vapers who previously smoked cigarettes have successfully quit using vape.
These findings are consistent with global trends. In fact, governments in the United Kingdom and New Zealand advocate vaping as a method of quitting smoking.
However, because there is currently no regulatory structure in place for vaping in Malaysia, users are turning to unregulated, untaxed nicotine products of unknown origin.
BAT Malaysia believes that an evidence-based regulatory framework for these goods should be implemented quickly.
This is part of BAT Malaysia's evolving corporate strategy and mission to achieve "A Better Tomorrow" by providing a wider range of less harmful products.
DIVERSE & INCLUSIVE
Working in Asia, Europe, Africa and the Americas for BAT, this experience has shaped Ballester's role in many ways.
Having covered multiple markets during his tenure, Ballester observed that there are more similarities than differences in the people across countries.
"I have learnt the importance of understanding the pace of change and to be more patient," Ballester said. "Regardless of where you are, the most important element in any organisation is the team you work with."
Another interesting thing he noticed is that people are motivated by different things and it is important to understand what drives each member of the team.
"Often, we assume people are driven by the remuneration they receive. However, this is not always the case. Some people are motivated by a very strong sense of family and a sense of community. As a leader, we have to understand our people and their motivations," he said.
BAT Malaysia is a diverse company that welcomes people of all genders, ethnicities and backgrounds.
"Through this, we are able to bring unique experience and perspectives, work in a vibrant and inclusive environment, share knowledge, ideas and fresh thinking while encouraging employees to be true to themselves," he continued.
BAT Malaysia has set bold goals as they continue to build "A Better Tomorrow".
The company plans to have 45 per cent of women in management roles, 40 per cent female leadership team, 50 per cent diversity in all key leadership teams, 20 per cent cross-industry hires in senior management teams and 70 per cent of locals heading their senior leadership teams by 2025.
Ballester also said that international careers come with their own set of difficulties and his suggestion is to stay focused and well-prepared.
"Always try new things and don't compare yourself to what you have at home. Always keep an open mind and build great relationships. The importance of understanding the cultural environment cannot be overstated."