Japan Tobacco May Close European Plants With 1,100 Jobs Affected

Japan Tobacco Inc., Asia’s biggest listed cigarette maker, may close some European manufacturing facilities after taxes and illegal trade triggered an industry slowdown in a number of countries in the region.

JTI’s plants in Lisnafillan, Northern Ireland and Wervik, Belgium would shut under the plan, with production moving to other sites, potentially in Poland and Romania, the Tokyo-based company said in a statement today. Some production in Germany will also be relocated, with about 1,100 full-time jobs affected across the European Union, it said.

“This restructuring proposal will allow JTI to optimize its operations, strengthen its competitive position and achieve its financial commitments in a challenging operating environment,” said the company, which makes Benson & Hedges and Silk Cut cigarettes outside the U.S.

Japan Tobacco is cutting jobs and closing factories as the company restructures its domestic business amid a declining number of smokers and a shrinking population. Depreciating currencies in emerging markets are putting pressure on profit from the company’s overseas tobacco business, which accounts for about half of Japan Tobacco’s sales. European factory closures will be completed from 2016 to 2018, the company said.

Japan Tobacco shares were little changed at 3,603 yen in Tokyo trading today.

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