Japan Tobacco to Close Two Domestic Factories

Japan Tobacco (JT) will close two factories in Japan and shed 3,000 jobs as the company restructures its domestic tobacco operations to meet falling demand, reports The Japan Times, citing JT President and CEO Masamichi Terabatake.

The facilities slated for closure are a tobacco plant and a filter-making facility in Fukuoka Prefecture. Both will cease operations at the end of March 2022.

The company will shed about 20 percent of its 13,500 workers. It will offer buyout packages to 1,000 full-time and 150 postretirement workers while asking about 1,600 part-timers to quit. All of them are expected to leave the company at the end of March 2022.

The measures are part of a comprehensive restructuring plan announced on Feb. 9.

The company will consolidate its domestic and overseas tobacco businesses while unifying its headquarters functions into Geneva in January 2022. The Japanese headquarters will be left with domestic marketing and product development functions.

In Japan, JT will reorganize its operations into 47 branch offices from the current combination of 15 branch offices and 145 outposts covering smaller areas.

JT said its sales fell 3.8 percent to ¥2.09 trillion ($19.95 billion) in 2020 from the previous year. The coronavirus pandemic dragged down tobacco sales at airport duty-free shops while restaurant demand for processed food products sagged, the company said in its 2020 financial report.

Net profit dropped 10.9 percent to ¥310.2 billion, although the company booked ¥41.3 billion in proceeds from the sale of its old headquarters building.

In October, JT relocated its Japanese headquarters to a new location in Tokyo.