573 jobs to be ‘affected’ by Moscow factory closure

Japan Tobacco said on Friday that it was going to close its Moscow factory by the middle of next year because of the serious contraction that had occurred on Russia’s tobacco market.

‘The operating environment has changed dramatically in Russia, with significant declines in tobacco demand driven by tax increases, tighter regulations and a challenging economic situation,’ JT said in a note posted on its website.

‘The company came to this conclusion following a thorough analysis of the situation and of all available options.

‘The Moscow factory will cease to operate by mid-2016, with production moving to the company’s St. Petersburg factory.

‘This move will affect 573 jobs. Impacted employees will be offered generous compensation, significantly above the labor legislation requirements in Russia.’

JT said it was committed to maintaining a strong market presence in Russia and would continue to invest for sustainable business growth in the mid- to long-term.

The factory closure was expected to have minor effect on the group’s consolidated performance for the fiscal year 2015.