It will have halved its workforce in the last two years and is closing its Peterborough operations while taking a pounds 16m pre-tax exceptional charge in the 1998 financial year.
The latest cuts will help the company reduce its cost base by pounds 10m annually but also add to the reduction of its business. Yesterday Molins agreed at an extraordinary general meeting to sell off its Langston corrugated board company. This leaves it dependent on tobacco machinery for 70 per cent of its activities with a small packaging business responsible for the other 30 per cent.
The problems in the tobacco machinery business stem from a period of over-ordering by China coupled with depressed demand from other crisis- hit Far East countries.
China believed it had a growing export trade for which it began to purchase a great deal of new equipment. It slammed the brakes on this development after realising much of the demand was coming from its own black market.
Although cigarette sales have been growing, the tobacco machinery business has also been hit by the continuing threat of legislation in the US. This has forced major producers like Philip Morris to put off new investment decisions.
Molins will cut 400 of the 1,350 staff who work within the tobacco machinery division. It is expected to close Peterborough and consolidate its activities on a site at Saunderton over the next six months.