Scandinavian Tobacco Group (STG) will close two machine-made cigar plants in what the company termed an acceleration of its cost reduction programme that will reduce the number of factories to 12 from 14.
Production at Nykøbing Falster, Denmark, and Wuustwezel, Belgium will be shifted to other facilities as part of the programme to cut costs by DKK 140 million (EUR 18,8 million) and reduce working capital to DKK 500 million, STG said in a 22 Sept statement.
“We recognise that today's announcement affects our employees and their families. Also for local communities this is an unpleasant event. Our factories have long histories in the cities where we manufacture,” said Chief Executive Officer Niels Frederiksen. "We have completed our SKU rationalisation programme and we have implemented the EU Tobacco Products Directive. We now intend to proceed to the next phase of our optimisation and efficiency programme and thereby accelerate the programme by one year.”