Reynolds American to Shut 2 Plants, Cut About 60 Jobs

Source from:  Reuters 05/31/2010

Cigarette maker Reynolds American Inc (RAI.N) said it will cut about 60 jobs as it closes two of its older factories in a bid to fight declining tobacco sales in the United States and gain a bigger share in the smokeless tobacco business. Reynolds, which makes Camel and Pall Mall cigarettes and Grizzly smokeless tobacco, said it will close its Winston-Salem based Whitaker Park factory, as well as one in Yabucoa, Puerto Rico, and will move production from these to its largest facility in Tobaccoville, North Carolina. Meanwhile, the Winston-Salem, North Carolina-based company is expanding its subsidiary American Snuff Co -- which has been making smokeless tobacco products for over 200 years -- by investing in facilities in Memphis and Clarksville, Tennessee. "These changes make our companies more efficient in light of the declining U.S. cigarette industry and growth in smokeless tobacco," said Chief Executive Susan Ivey. "Consolidating production into fewer and newer facilities will also facilitate cost-effective compliance with new federal regulation of the tobacco industry," Ivey added. The Whitaker Park factory, which has been functional for about 50 years now, will cease manufacturing in mid-2011, the company said in a statement on its website. While employees from the headquarter-based plant will move to Tobaccoville this summer, about 60 employees at the Puerto Rican factory stand to lose jobs, the company said. However, the company's distribution operations in Puerto Rico will not be affected by the plant closure. Reynolds shares were down 14 cents at $52.51 in midday trade Friday on the New York Stock Exchange. Enditem