The plant is expected to support the Government's efforts to keep out low-quality smuggled tobacco from the delta and Viet Nam in general.

The VND160 billion facility will both sell its products domestically and export when it begins production in 2017, turning out an expected 750 million cigarettes in the first five years, 50 per cent of it for export.

Representatives of BAT and Vinataba kick off the project.

Annually, the plant will consume around 175 tonnes of tobacco, paving the way for expansion of tobacco cultivation as well as improving the quality of domestic supply. It is also expected to pay more than VND2.6 trillion in taxes in the first 10 years of operations.

Speaking at the ground-breaking ceremony, Peter Henriques, general manager of BAT East Asia, said: "The new plant will help Kien Giang Province, especially Chau Thanh District where our plant is, usher in new production values and restructure the economy, and contribute to local revenues.

"Apart from providing jobs to local workers, we will carry out training programmes to help employees acquire professional skills and knowledge to run the plant efficiently and make products of international quality. The plant will also benefit from BAT Group's world-class business management in creating a well-trained local workforce".

Peter Henriques, general manager of BAT East Asia, pays thanks for strong support of the Government and relevant agencies for the project.

The setting up of the plant marks an important milestone for VINA-BAT, a joint venture between Vinataba, Viet Nam's leading tobacco company, and BAT.

"At BAT, we believe that the successful cooperation between BAT and Vinataba over the past two decades is an outstanding symbol of sustainable and bonding relationship between foreign-invested enterprises and Vietnamese companies since Vietnam opened her doors to foreign investment," Henriques said.

Vu Van Cuong, chairman of Vinataba, said: "We believe VINA-BAT's factory in Kien Giang Province with its high-quality products will effectively contribute to the fight against illicit tobacco and to the local budget.

"More importantly, this will help Viet Nam's tobacco industry gradually integrate with the tobacco global chain as well as the global economy."

In recent years the tobacco industry has been paying VND19,000-20,000 billion (nearly US$1 billion) a year in taxes and providing six million jobs including to workers, tobacco farmers and workers in related commercial and service sectors.

The industry has also contributed hundreds of billions of dong for social improvement and poverty mitigation.

But it has been facing many difficulties and challenges, including the rapid increase in tobacco smuggling into Viet Nam. Trading in contraband tobacco has become highly sophisticated. In the past illicit tobacco was found mainly in the Mekong Delta, but now it can also be found in the central and northern regions. In other words, it is now a national problem.

In this context, the Government and competent authorities have adopted many effective measures to prevent smuggled tobacco from entering Vietnam.

To reduce the consumption of illicit tobacco, one of the key solutions is to offer consumers and promote legal products of better quality that comply with health-warning and packaging regulations.

BAT Group and Vinataba jointly donated VND500 million to Kien Giang Province's fund to build charity houses. — VNS Photos

From that perspective, VINA-BAT's tobacco plant has received strong support from local authorities in the hope it will help decrease contraband tobacco and provide consumers with quality products.

On the occasion of the ground-breaking, BAT Group and Vinataba jointly donated VND500 million to a Kien Giang Province fund to build charity houses, actualizing their commitment to fully support the Mekong Delta province's socio-economic development.