HEIDELBERG – Lesedi Local Municipality (LLM) has confirmed that it is engaging British American Tobacco South Africa (BATSA) following the company’s announcement that it will close its Heidelberg manufacturing facility at the end of 2026, a move expected to have significant consequences for the local economy.

Municipal spokesperson Katleho Seaga said that the municipality has maintained consistent communication with BATSA since the announcement was made.

“The company’s decision was received with shock, particularly in view of its economic repercussions. The downsizing process has been ongoing since the rightsizing phase triggered by, among other factors, the Covid-19 pandemic. A report on the matter will soon be presented at council,” he said.

Seaga said the gradual reduction in BATSA’s operations already had a noticeable impact on municipal revenue and employment levels.

“From a municipal revenue perspective, income linked to the facility has declined from approximately R18m per month before Covid-19 to between R2m and R3m per month currently.

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“Unemployment has increased, resulting in lower revenue collection, and its full closure will have a massive effect on the local economy.

“Constant meetings and communication are underway, and further engagements will focus on mitigation strategies and post-occupation plans,” he said.

To reduce the impact of job losses, Seaga said the municipality proactively engaged the provincial government to attract alternative investors to the site previously occupied by BATSA.

“This intervention aligns with the municipality’s investment attraction plan, which prioritises job preservation, economic diversification, and the optimal use of existing industrial infrastructure.

“The municipality has also developed the Heidelberg Precinct Plan to reposition Heidelberg as a competitive investment destination.

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“The plan identifies opportunities in mixed-use industrial development, logistics, and light manufacturing in line with the spatial development framework, which recognises Heidelberg as a key economic node,” Seaga said.

Seaga further highlighted the planned N3 Logistics Hub as a catalytic project expected to stimulate private sector investment and create employment by leveraging Lesedi’s strategic location along major freight routes.

“In addition, the municipality is preparing for the launch of a special economic zone (SEZ), scheduled to commence operations in February.

“With two confirmed investors already committed, the SEZ is expected to generate significant economic activity, create sustainable employment and contribute positively to municipal revenue.

“The municipality has a social relief plan for indigent households, and our local economic development, enterprise development and social welfare programmes will be utilised to support affected families,” Seaga said.