Japan Tobacco today announced a proposal to restructure its manufacturing facilities in the European Union (EU) for the purpose of optimizing its operations and strengthening its competitive position in a challenging operating environment. The company will undertake appropriate consultations with employees’ representatives and the European Works Council on the proposal to change its product sourcing, which could lead to the closure of some of its manufacturing sites.
The prolonged challenging economic environment and excise tax pressure has triggered industry volume contraction in key European countries. This is compounded by the need to comply with legislation, including the revised EU Tobacco Products Directive, which will significantly reduce the number of pack formats to be produced for various markets. These developments have forced the company to review its manufacturing operations.
Under the proposal, the company’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 manufacturing in Trier, Germany, would also be relocated, with the exception of Ploom-related production.
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 EU.
JT says the restructuring proposal will be implemented in phases, recognizing the needs of each country, with factory closures completed between 2016 and 2018.
Japan Tobacco Inc’s domestic cigarette sales volume during March, at 9.7 billion, was down by 3.6 percent on its March 2012 volume, 10.1 billion, which itself was down by 3 percent on that of March 2011, according to preliminary figures issued by the company.
Volume during the 12 months, April 2012-March 2013, at 116.2 billion, was up by 7.2 per cent on its April 2011-March 2012 volume, 108.4 billion, which was down by 19.5 per cent on that of April 2010-March 2011.
JT’s market share stood at 60 percent in March, at 59.6 percent during April 2012-March 2013, and at 54.9 percent for the full year to the end of March 2012.
JT has suffered huge domestic volume swings in recent times because of an unprecedented, mainly tax-driven price hike on October 1, 2010, and the massive disruption caused to the company’s manufacturing and distribution operations following the earthquake and tsunami of March 11, 2011.
JT’s domestic cigarette revenue during March, at ¥53.4 billion, was down by 4 percent on its March 2012 revenue, ¥55.6 billion, which was down by 3.4 percent on that of March 2011.
Revenue during April 2012-March 2013, at ¥639.5 billion, was up by 7.2 percent on its revenue during April 2011-March 2012, ¥596.6 billion, which was down by 3.3 percent on that of April 2010-March 2011.
Japan Tobacco Inc. said today that it will relaunch from late May its Zerostyle Mint smokeless tobacco product with improved flavor and aroma, and a redesigned pack.
The relaunched product, Zerostyle Blue Mint, which is due to be rolled out across Japan, will have the same flavour and aroma as that of Zerostyle Drive Concept, which proved popular with consumers when it was launched in limited quantities in October 2012.
JT said in a press note posted on its website that Zerostyle Drive Concept had proved popular because of its “brisk and strong menthol flavor and aroma,” combined with a “subdued sweetness.”
The new product will retail in a pack whose design is based on that of Zerostyle Mint but that uses a blue color tone to reflect the brisker, stronger menthol flavour.