After 40 years of business, R.J. Reynolds Tobacco Co. plans to close its cigarette manufacturing plant in Puerto Rico. Reynolds, which makes Camel and Pall Mall cigarettes and Grizzly smokeless tobacco, has decided to move production to its biggest facility in Tobaccoville, North Carolina and to shut its Winston-Salem based Whitaker Park factory, as well as one in Yabucoa, Puerto Rico.
When the plant closes in the end of August, nearly 60 employees are estimated to lose their jobs, says Spokeswoman Denise Santos.
Santo explains the reason stating that it would be too luxurious to make upgrades required by new federal regulations and because an increase in taxes led to a drop in manufacturing volume.
Meanwhile, the Winston-Salem, North Carolina-based Company is expanding its subsidiary American Snuff Co, which has been making smokeless tobacco products for over 200 years, by investing in facilities in Memphis and Clarksville, Tennessee.
"These changes make our Companies more efficient in light of the declining U.S. cigarette industry and growth in smokeless tobacco," said Chief Executive Susan Ivey.
Consolidating production into fewer and newer facilities will also facilitate cost-effective compliance with new federal regulation of the tobacco industry, Ivey added.
The company's distribution operations in Puerto Rico will not be affected by the plant closure. Reynolds shares were down 14 cents at $52.51 in midday trade Friday on the New York Stock Exchange.