500 jobs go as BAT closes Darlington factory

British American Tobacco (BAT) has announced today that around 500 jobs are to go in what has been described a "restructuring process".

It is proposed that the Darlington factory closes by the end of 2004 and that cigarette manufacturing be consolidated at the larger Southampton plant - resulting in the loss of some 490 jobs.

About 90% of output from the two UK factories – including Dunhill, State Express 555 and Rothmans International brands – is exported outside the European Union.

However, the company said, production volumes have been transferring overseas as a result of an increasing trend towards local manufacture in key markets including South Korea, Russia and Nigeria. The company also blames the "relatively higher manufacturing costs in the UK" as a contributing factor.

BAT also said that subsidiary Imperial Tobacco Canada will lose 840 jobs, in order to maintain its "leadership position" in the tobacco industry despite a reduction in sales, the steady decline in total industry volume and the resulting overall industry over-capacity.

Paul Adams, BAT’s Managing Director, said: “We very much regret job losses, especially when our people contribute so much to the group’s success. However, we are committed to improving productivity in order to strengthen our competitive position in the world, deliver profit growth, and ensure the continued long-term success of the group.”

The company has declared that it will now enter into "appropriate consultation and discussions" with employees and trade unions.

Today’s plans will create an exceptional charge of around £320 million in the first half of 2003 for redundancies and asset write-downs.

However, due to the restructuring, the group's yearly savings are expected to top around £65 million from 2005.

(GMcG)