Sonoco plans to shut down two tobacco production plants in Germany

22 December 2015 (Last Updated December 22nd, 2015 18:30)

Packaging solutions provider Sonoco Consumer Products Europe intends to shut down two of its tobacco production plants in Germany as part of a general restructuring process.

Packaging solutions provider Sonoco Consumer Products Europe intends to shut down two of its tobacco production plants in Germany as part of a general restructuring process.

The move is expected to be influenced by the revised European Tobacco Product Directive, which has resulted in production volume declines at both the facilities.

Operations at the Bunde plant in Northwest Germany are anticipated to be closed by May next year, while the Hockenheim 3 plant in the southwest parts of the country is expected to be shut down in the third quarter of 2017.

"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."

The Bunde plant has a production capacity for 100 million units and the Hockenheim 3 plant can manufacture 130 million units.

Sonoco, instead, has announced further investments for its plastic packaging products. The firm's Zwenkau plant in Eastern Germany will receive €6.5m in the next 12 months.

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 in the month, the firm had announced investments of up to $15m for boosting composite can production capacity in Poland and $20m for a new facility in Kuala Lumpur, Malaysia.

Sonoco also plans to invest in a new composite can line at its Shanghai facility in China, and develop a second new plant in South China in 2016 or 2017.