Cigarette manufacturer Gallaher, is planning to expand into South Africa to grab a greater share of a market where 26 billion cigarettes are sold each year.

The maker of Silk Cut has said it has nearly completed the acquisition of a factory site in the country and that production is expected to start later in the year.

British American Tobacco currently has 90% of the cigarette market in South Africa but recently Philip Morris and other tobacco groups have been working to increase their market shares.

Gallaher is also looking to expand in Asia and it has already signed an agreement with the China National Tobacco Import Export Company to import its LD brand and it has an agreement with the Shanghai Tobacco Group to manufacture its Memphis brand under license.

The company saw its pre-tax profit rise by 13% from £379m to £429m last year, according to reports. Turnover was 9.5% higher at £3.99m.

Market volumes declined by 11% in Ireland following the smoking ban.