Cigarette production of BAT to move to East Asia, job cut panic |
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Sat, 04 Jun 2005 17:15
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The second largest tobacco group in the world, British American Tobacco, with leading brands like Dunhill, Lucky Strike and Kent decides to transfer 25% of the Southampton's volume to the company owned factories in South Korea and Singapore in East Asia.
An intricate review of production and other facilities will soon take place but what is “inevitable” is that there would be phenomenal job loss and this is a great concern, which has given rise to immense fear and worry.
National Officer of Amicus, Iain MacLean clearly indicated “This is a huge kick in the teeth for BAT's loyal workers and a devastating blow for the local economy. 'These are well-paid and highly-skilled jobs which Southampton can ill-afford to lose.”
Head of UK operations of BAT, Allan Short said “'Costs of production in the Far East are far lower, and the factories in Singapore and Korea are much closer to the destination markets”.
| The Southampton plant, which produces 24 billion cigarettes, meets the export needs of the tobacco giant, and to produce the same nearer the markets made logical sense. This move to commence in November will be completed by mid 2006 and hopes to bring substantial cost reductions.
Southampton factory, which started operating in 1913, ensured 90% of the export to markets outside EU. It has an employee base of 600 members in its manufacturing setup with about 140 people looking after R&D.
The plant, which was, restructured in 1992, manufactured 40bn cigarettes a year while operating in double shifts across 24 hours. In the prevailing circumstance, it only produces 25bn cigarettes a year and operates on a single shift.
BAT formerly announced the closure of a factory in Spennymoor, Durham in 1999 with total loss of 460 jobs. This followed a shut down of another plant in Darlington (about two years back) resulting in loss of 490 jobs.
The company breathes a sign of relief from the fact that it has at least experienced strong sales in emerging and developing economies like Turkey, Malaysia, Russia and Pakistan with incessant decline across other areas.
R&D unit of the company, which carried confidential studies of BAT in the areas of health risks of smoking, was reluctant to disclose any further information and reports. It is debated that BAT knew about some health hazards and its implications. This has given rise to legal battles by dying smokers in the US, and BAT who denies such claims, have had cases in their favor for many a times.
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