Sonoco to close two tobacco production plants in Germany

Thursday, Dec 24, 2015

Sonoco Consumer Products Europe is planning to close two of its tobacco production plants in Germany, resulting in the removal of 100 employees.

The Bunde plant in Northwest Germany will be closed by May 2016 and Hockenheim 3 plant in Southwest Germany in the third quarter of 2017.

The company will invest €6.5m in its Zwenkau plant in Eastern Germany over the next 12 months.

Sonoco's Bunde plant produces 100 million units and the Hockenheim 3 plant has a production capacity of 130 million units.

The closures are a response to recent production volume losses at both the plants.

Sonoco Consumer Products Europe general manager and vice-president Séan Cairns said: "Although our European business with consumer packaging keeps on growing and is developing very positively, we recently faced a significant decline in the production of tobacco packaging due to the revision of the European Tobacco Product Directive.

"For this reason and to make sure that our business is fit for the future, we plan to restructure our production in Germany.

"While the planned closure of Bunde and Hockenheim 3 is a difficult decision, the capital to be spent in Zwenkau will turn our production site into one of the most efficient German plants in the industry."

Earlier this month, Sonoco announced multi-million dollar investments in its composite can production facilities across the globe.

It plans to invest up to $15m in composite can production capacity in Poland, and $20m in Kuala Lumpur, Malaysia; and open a new line at its new plant in Shanghai, China.

Announcing Sonoco's financial results in early December, CEO Sanders said: "Sonoco expects to continue investing capital and other resources to meaningfully expand the company's consumer packaging scale, while further shifting our business mix to deliver more consistent earnings along with improved returns."

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