JT International Bhd (JTI Malaysia) has said it will close its plant in Shah Alam, Selangor, by the end of December, a move that end its manufacturing operations in Malaysia, according to a story in The Edge Financial Daily.
The closure will see about 270 people made redundant and production outsourced to other JTI production facilities.
The news comes in the wake of a statement by British American Tobacco (M) Bhd (BAT Malaysia) in March 2016 that it would close its cigarette-making facility in Petaling Jaya, Selangor, by the second half of 2017, ‘affecting’ 230 people.
According to the Daily’s story, JTI Malaysia said in a statement to it that the ‘extremely challenging’ operating environment in Malaysia was one of the main reasons behind the group’s decision to close its plant. It added that the decision was taken after an extensive review of how it supplies its products to its consumers and the operating environment in Malaysia.
“To ensure consistency in the supply of our quality products to our consumers in Malaysia, we will now source products, for the Malaysian and other Asian markets where we operate, from other JTI production facilities,” the company said.
For the past few years, the three major tobacco companies, BAT Malaysia, JTI Malaysia and Philip Morris (M) Sdn Bhd, have been complaining about the steep increases in tobacco excise taxes that have been imposed and the level of illegal tobacco trade in the country.