Universal Corporation said yesterday that its subsidiary, Universal Leaf Tobacco Hungary (ULTH), would stop processing leaf tobaccos at its factory in Nyíregyháza, effective immediately.
‘In order to further increase supply chain efficiencies in the European leaf tobacco market, Universal will concentrate the processing of Hungarian tobaccos in its facilities in Italy,’ the company said in a press note.
According to a Reuters report relayed by the TMA, the ULTH management said it had signed a settlement agreement with the employees who were expected to be sacked as a result of the decision. The company was said to employ 52 permanent workers and 150 seasonal workers.
“This difficult decision was made after an exhaustive review of strategic alternatives for the Hungary processing operations,” said Domenico Cardinali, managing director – Europe region.
“Universal would like to recognize and thank the employees for their many years of hard work and dedication. In addition, Hungary management has reached agreement with the affected employees and their representatives for a planned settlement to support them in this challenging transition.
“This change will yield economies of scale for our Europe region and enhance the attractiveness of Hungarian tobaccos in the international market, with a goal to better serve its traditional customers.”
Universal said the restructuring was in line with its strategy to adapt its operations to changing market conditions.
It said it was committed to the ‘production and purchasing of Virginia flue-cured and burley tobaccos grown in Hungary and intends to maintain its traditionally strong market presence in the country’.