30th Mar 2006 13:15
Imperial Tobacco Group PLC30 March 2006 March 30, 2006 IMPERIAL TOBACCO GROUP ANNOUNCES RESTRUCTURING OF MANUFACTURING OPERATIONS INLAHR, GERMANY Imperial Tobacco Group is to restructure its manufacturing operations in Lahr,Germany, as a result of the European Court of Justice ruling on the taxation ofSingles products. Following the ruling by the European Court of Justice on 10 November 2005, theGerman Ministry of Finance announced that Singles products will continue to betaxed as fine cut tobacco until 31 March 2006. Singles produced after this datewill be taxed as cigarettes and will therefore no longer represent an attractivevalue offering to consumers. As a result, Imperial Tobacco Group will cease production of Singles after 31March 2006. This will regrettably result in the loss of around 155 of the 283jobs at its other tobacco products factory in Lahr, although there will be someredeployment opportunities. The remaining employees will continue to manufacture Eco Cigarillos, which theGroup believes will appeal to Singles consumers. However, consumer migration isvery uncertain and the Group will therefore need to maintain flexibility withinits manufacturing operations in Lahr, to ensure that its cost base remainsefficient as it continues to carefully monitor market developments. David Cresswell, Imperial Tobacco Group Manufacturing Director, said: "It isregrettable that we have to restructure our operations in Lahr as a result ofthe European Court of Justice ruling on the taxation of Singles. However, it isimperative that we continue to deliver efficient and competitive operations inthe challenging German market." Employees, the works council and trade unions were informed of the decisiontoday and the consultation process with the relevant bodies is now underway. The restructuring will be complete as soon as possible to ensure that the Groupcontinues to maintain an efficient cost base, and is expected to generate annualcost savings of around £4 million from the 2006-07 financial year. It isanticipated that there will be a restructuring charge of around £18 million inthe current financial year, of which £8 million will be non-cash items. Mr Cresswell added: "We have a track record of managing these situations in afair and responsible manner and our focus now is on continuing to support ouremployees." ENQUIRIES Alex Parsons Group Media Relations Manager +44 (0)117 933 7241 John Nelson-Smith Investor Relations Manager +44 (0)117 933 7032 NOTES TO EDITORS Imperial Tobacco Group Imperial Tobacco Group is the world's fourth largest international tobaccocompany. The Group manufactures and sells a comprehensive range of cigarettes,tobaccos, rolling papers and cigars in 130 countries worldwide. It currently has15,000 employees and 32 manufacturing sites. The other tobacco products factory in Lahr has 283 employees and produced around7 billion Singles and around 800 million Eco Cigarillos for the German market inthe last financial year. Singles (also known as modern make your own tobacco products) refers topre-rolled cartridges of tobacco, which are not able to be smoked whenpurchased. The cartridges are inserted into cigarette paper tubes with filters,using a special device resembling a pen. The tobacco cartridges and the papertubes with filters are sold separately. Eco Cigarillos are an American blend tobacco rolled in a brown tobacco leafinstead of a white cigarette paper. They are available with or without filter. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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