About 4,900 jobs to go as Sampoerna looks to axe two hand-rolling plants

Sampoerna said on Friday that it planned to restructure its hand-rolled kretek cigarette (SKT) manufacturing operations in Indonesia, a development that would “impact” about 4,900 employees.

“The company has decided to discontinue the production in its SKT manufacturing facilities in Jember and Lumajang as of 31 May 2014, while at the same time continue to focus its SKT production at the five remaining production facilities, namely Surabaya (Rungkut I, Rungkut II and Taman Sampoerna), Malang and Probolinggo,” said a note posted on the website of Philip Morris International, which acquired Sampoerna in May 2005.

“Regretfully, this restructuring means that approximately 4,900 employees at [the] Jember and Lumajang manufacturing facilities will be impacted by the shutdown.”

Maharani Subandhi, corporate secretary at Sampoerna, said the decision to close the two facilities had been “extremely difficult” to take.

“We understand that this is unfortunate news for all of our employees, particularly those who are directly impacted in Jember and Lumajang SKT manufacturing facilities.

“Our priority today is to provide them with the best possible support and assistance during this difficult time. Those affected by this decision will receive severance package[s] above legal requirements, including Idul Fitri (THR) bonus. In addition, we will provide them with [the] opportunity to participate in the entrepreneurship training program to assist them in finding new source[s] of income.”

In April, PMI said Philip Morris Holland (PMH) had announced that it planned to end cigarette production at its factory at Bergen op Zoom, the Netherlands, with the loss of about 1,230 jobs.

And the announcement of the proposed Bergen op Zoom closure, which is due to happen by October, followed hard on the heels of Philip Morris Limited’s decision to stop cigarette manufacturing in Australia by the end of this year, with the loss of about 180 jobs at its factory at Moorabbin, a suburb of Melbourne, Victoria.

The full text of the Indonesian announcement is at http://www.pmi.com/eng/media_center/press_releases/Pages/pt_hm_sampoerna_tbk.aspx.