British American Tobacco (LON:BATS) has announced plans to double the number of countries it sells its vaping products both this year and then again in 2018.
BAT, alongside its rival Philip Morris International (NYSE:PM) hopes to grab a share of the market which is growing at fast rates.
BAT currently has the biggest vapour business in the world outside of the United States and has almost 40 percent of the market in Britain and around 50 percent in Poland.
“It is really only the beginning,” Kingsley Wheaton, head of the next generation products at BAT, adding BAT has invested over $1 billion in the cigarette alternatives. “We are committed to delivering more innovation and less harm.”
However, analysts say BAT is struggling to catch up with Philip Morris in the growing vape market, where the U.S. firm has established a strong presence with its IQOS device, which was the result of a decade of research and over $3 billion of investment.
In December, BAT launched a Vype-branded vaping device called Pebble and also launched a product called Glo in Japan in attempts to catch up with its American rival.
According to the Chairman of BAT, Richard Burrows, the 2016 results show the firm’s ability to continue delivering shareholder returns whilst also investing in the business’ future.
“The 10 percent increase in our total dividend for 2016 to 169.4p reflects our confidence in our strategy, our people and in generating growth for our shareholders in 2017 and beyond,” he said.
“Both would be made stronger by our proposed acquisition of Reynolds American, creating what will become a truly global tobacco and next generation products company, delivering sustained long-term profit growth and returns.” he added.
The growth in the vape industry is linked to the health benefits, compared to cigarettes. According to some reports, e-cigarettes are up to 95 percent less harmful than tobacco.