Japan Tobacco Inc. may close some European manufacturing facilities after taxes and illegal trade triggered an industry slowdown in a number of countries in the region.
JT’s plants in Lisnafillan, Northern Ireland, and Wervik, Belgium, would shut under the plan, with production moving to other sites, potentially in Poland and Romania, the Tokyo-based company said Tuesday.
Some production in Germany would also be relocated, with about 1,100 full-time jobs affected across the European Union, it said.
“This restructuring proposal will allow JT to optimize its operations, strengthen its competitive position and achieve its financial commitments in a challenging operating environment,” the company said.
JT is cutting jobs and closing factories as the company restructures its domestic business amid a declining number of smokers and a shrinking population. Depreciating currencies in emerging markets are putting pressure on profit from the company’s overseas tobacco business, which accounts for about half of JT’s sales. European factory closures will be completed from 2016 to 2018, the company said.