BAT is considering moving production from Germany to Croatia, Romania, Hungary or Poland, where they already have a large factory
British-American Tobacco (BAT), owner of the Rovinj Tobacco Factory, is preparing to move cigarette production from Germany to Eastern European countries, with Croatia as a potential candidate, Poslovni Dnevnik reported on July 12, 2016.
BAT Supervisory Board will make a decision during this week on closing the plant in German Bayreuth, as reported by the German daily Die Welt, according to source from the Board.
The German BAT branch has confirmed that information of the fate of European plants should be published by the end of the month.
The Bayreuth plant in its best times produced 53 billion cigarettes annually, a third for the German market and the rest exported primarily to European countries.
The first signs of a planned abolishment of production were seen several years ago, after BAT decided to withdraw information technology and tobacco procurement units from Hamburg to London. The reason given was restructuring on the concern level. Financial operations had already been pulled out of Hamburg.
Currently BAT is considering moving production from Germany to Croatia, Romania, Hungary or Poland, where they already have a large factory. The plan itself is not news, with the concern stating the argument of high salary costs in the Bayreuth plant.
After relocating production, the Bayreuth plant, where there are currently 400 workers, should produce only finely cut tobacco, considering the strong growth of the market of rolled cigarettes in the last years.
BAT with a 20% share is currently third in the German market, led by Phillip Morris and in second place Reemtsmi.
The reorganisation should take a few years, during which BAT wishes to motivate as many workers to leave voluntarily with high severances or early retirement options.
