Scandinavian Tobacco Group has announced that it is reducing the number of its production sites and as a result will be closing the Scandinavian Tobacco Group Lane Ltd.’s facility in Tucker, Georgia. This will bring the number of its production sites down to 11. The closure of the Tucker, Georgia facility is expected to be completed by the end of 2020.
Scandinavian Tobacco Group Lane Ltd.’s Tucker, Georgia facility manufactures brands within the Group’s portfolio of pipe tobacco, fine-cut tobacco and little cigars. With these markets being in decline, the company believes closing the Tucker facility will help the company adjust the capacity to current and projected volumes and could improve the Group’s overall annual cost structure by more than DKK 20 million (USD $2,978,952) when the closure is fully completed by the end of 2020. Production will be transferred to the company’s facilities in Assens and Holstebro, Denmark and Santiago, Dominican Republic. The transfer of production is expected to incur investments of about DKK 30 million (USD $4,468,391).
The closure of the Tucker production facility is expected to result in positions being terminated at Scandinavian Tobacco Group Lane Ltd. According to the company, the affected employees will be offered outplacement support.