JT considers major restructuring in EU

Japan Tobacco today announced a proposal to restructure its manufacturing facilities in the European Union (EU) for the purpose of optimizing its operations and strengthening its competitive position in a challenging operating environment. The company will undertake appropriate consultations with employees’ representatives and the European Works Council on the proposal to change its product sourcing, which could lead to the closure of some of its manufacturing sites.

The prolonged challenging economic environment and excise tax pressure has triggered industry volume contraction in key European countries. This is compounded by the need to comply with legislation, including the revised EU Tobacco Products Directive, which will significantly reduce the number of pack formats to be produced for various markets. These developments have forced the company to review its manufacturing operations.

Under the proposal, the company’s facilities in Lisnafillan, Northern Ireland, and Wervik, Belgium would cease to operate, with production moving to other facilities, potentially in Poland and Romania.

Other tobacco product manufacturing in Trier, Germany, would also be relocated, with the exception of Ploom-related production.

Support for affected employees will be discussed as part of the consultation process. This proposal would affect approximately 1,100 full-time jobs across the EU.

JT says the restructuring proposal will be implemented in phases, recognizing the needs of each country, with factory closures completed between 2016 and 2018.