Cigarette Manufacturer Closes Factory

Source from:  The Copenhagen Post 10/27/2009

House of Prince shuts down its plant in Copenhagen due to overcapacity and high production costs. Denmark's only cigarette manufacturer, House of Prince, will close resulting in the loss of 500 jobs. House of Prince was formed in 1990 as an independent subsidiary of the Scandinavian Tobacco Company and was bought out by British American Tobacco (BAT) in February last year. Operations at the S?borg-based company will gradually be wound down over the next two years before a final closure in 2011. BAT Denmark's senior vice president Peter Dalsberg said in a statement that the factory was closing due to overcapacity as cigarette sales were falling across Europe. High production costs were also a factor. An analysis of BAT's European production showed that Danish employees were being paid 10 times as much as their Romanian counterparts. "The reality means unfortunately that we have to make the painful decision to close the factory in S?borg," Dalsberg said. The factory produces 12 billion cigarettes annually, or the equivalent of three million packets a day. Factory workers were already warned in September that a closure was inevitable. Enditem