Factory Closure Proposal

1 Jun 2006 13:03

British American Tobacco PLC01 June 2006 British American Tobacco announces factory closure proposal British American Tobacco today said that its operating company in theNetherlands has announced that it is to initiate consultations on a proposal tocease manufacture at its factory in Zevenaar and transfer production to Germanyand Poland. Subject to consultation, the factory will close during 2008, with a loss of some570 jobs. Today's announcement has come as a result of a review into thesustainability of the Zevenaar site, following the strategic decision by BritishAmerican Tobacco's Europe Region to concentrate EU manufacturing investment inits plants in Germany and Poland. Consultation with the works council willcommence within the next few days. The Zevenaar factory manufactures cigarettes for the Netherlands and marketsacross Europe. Jan Withag, Managing Director, British American Tobacco Manufacturing B.V. said:"We regret this conclusion, but it is unavoidable. We are grateful to ouremployees for their commitment and loyalty during what has been a difficultperiod, and we will actively support them in securing new futures." Today's announcement would create a restructuring charge of approximately €235million (of which some €175 million would be cash), the majority of which islikely to be charged in 2006. Annual savings, once full benefits have beenrealised, would be approximately €40 million. ENQUIRIES British American Tobacco Press Office Investor RelationsDavid Betteridge/Teresa La Thangue / Ralph Edmondson/Rachael CumminsCatherine Armstrong+44 (0) 20 7845 2888 (24 hours) +44 (0) 20 7845 1180 or 1519 This information is provided by RNS The company news service from the London Stock Exchange