Geneva, October 7, 2014 – Japan Tobacco International (JTI) today announced a proposal to restructure its manufacturing facilities as a result of significant and sustained changes impacting its global business.
The challenging economic environment, excise tax pressure coupled with illegal trade has triggered industry volume contraction in a number of key European countries. This is compounded by the need to comply with legislation, including the revised EU Tobacco Products Directive (TPD2), which will significantly reduce the number of pack formats to be produced for various markets.
This inevitably has led to the need to review JTI’s manufacturing operations. JTI will undertake appropriate consultations on proposals to change its product sourcing, which could lead to the closure of some of its manufacturing sites.
JTI’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 (OTP)1 manufacturing in Trier (Germany) would also be relocated, with the exception of Ploom2-related production.
Consultation with employees’ representatives and the European Works Council will be appropriately conducted.
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 European Union.
This restructuring proposal will allow JTI to optimize its operations, strengthen its competitive position and achieve its financial commitments in a challenging operating environment. Its implementation is to be phased, recognizing the needs of each country, with factory closures completed between 2016 and 2018.
JTI will not provide comments on financials during the consultation period.