Gallaher to shut plant in European shake-up

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The tobacco group Gallaher is to axe 430 jobs and close its Dublin factory as part of a move to restructure its European operations.

The group, which makes Silk Cut and Benson & Hedges cigarettes in the UK, said the job cuts would affect its British, Irish and Austrian operations.

Gallaher said its plans took into account its "broader international base". It acquired Austria Tabak in 2001 and Russia's Liggett-Ducat in 2000 and is focusing on extending its footprint into Central Asia.

The company will shut its factory in Dublin, shifting cigarette production to its Lisnafillan site in Northern Ireland. The move, which follows the closure five years ago of a factory in England, will mean 120 job losses in Dublin. Another 175 positions will go over two years at Lisnafillan, reflecting recent steps to modernise the site. A further 85 posts will go in Austria, with the remainder of the cuts spread across the group.

Nigel Dunlop, the group operations director, said: "Any proposal to reduce jobs is regrettable, particularly when our employees contribute so much to the success of the group." It broke the news to its staff yesterday.

Analysts said the restructuring would save the group £12m. Gallaher's shares rose 11.5p to 592.5p. The plans follow the closure of its Malmo factory in Sweden last year, which it acquired as part of the Austria Tabak deal.