British American Tobacco (BAT) will probably switch it's UK production to Romania

British American Tobacco (BAT) plans to close its last two factories in Britain and Ireland, with the loss of around 600 jobs, as it looks to switch cigarette production to Asia and continental Europe.

The world's second-largest cigarette group, which makes Lucky Strike, Kent, Dunhill and Pall Mall brands worldwide, said on Wednesday it was seeking to close its Southampton factory within 18 to 24 months, with the loss of around 530 jobs. Most of the plant's output is for export.
Irish unit PJ Carroll is planning to close its plant in Dundalk, 80 km (50 miles) north of Dublin, which employs 66 people. It is operating at 45 percent capacity following rises in tobacco taxes and Ireland's ban on smoking in public places.

That sound bad for the BAT’s British and Irish employees and interesting for BAT’s shareholders…

The restructuring will cost around 160 million pounds said BAT, most of that charged to 2005, but would save 40 million pounds a year thereafter.

BAT is a relatively small player in the UK cigarette market with around a 6 percent share through brands such as Rothmans, Dunhill and Lucky Strike, in a domestic market dominated by Imperial Tobacco and Gallaher Group

A BAT spokeswoman said the closures were forced by the two plants running at low capacity, a new European Union directive on higher-tar cigarettes and the cost savings from producing cigarettes nearer the markets where they are consumed.

The remaining Southampton production will probably switch to Romania, Switzerland and Poland, the spokeswoman added.

And that is a good news for Romania… new investments, new jobs…

It seems that Gavin Little – the BAT Managing Director in Romania is doing a great job!

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