Tobacco giant Philip Morris is closing its cigarette factory in suburban Melbourne, blaming Australia’s stringent fire safety regulations for the loss of up to 180 jobs.
In another blow to Australian manufacturing, Philip Morris Limited this morning announced the closure of the Moorabbin factory after almost 60 years of operation, moving the jobs to South Korea.
In a statement, the company said it was optimistic about exporting more Australian cigarettes overseas but “these forecast export opportunities have not been realised due to Australian government reduced-fire risk requirements introduced in 2010 on all locally manufactured cigarettes that do not match consumers’ preferences in other markets in our region”.
“This is an extremely difficult decision, and devastating news for all of our employees,” John Gledhill, PML’s regional managing director, said.
“Philip Morris Limited has a proud history of nearly sixty years of manufacturing in Moorabbin, being the first Philip Morris affiliate established outside of the United States, and many of our employees have been with the company for a significant part of that journey.
“With any significant export opportunity restricted by Australian government regulations, our Moorabbin factory is significantly under-utilised, operating at less than half of its currently installed capacity,”
Mr Gledhill said approximately 180 employees directly involved in manufacturing will be impacted by the planned closure, and extensive support will be provided to all employees throughout this period, including redeployment opportunities where feasible, counselling and coaching, career transition and outplacement support, and financial and retirement advice.
“Although closing the factory will require a review of our usage of the entire Moorabbin site, PML will maintain a strong ongoing commercial presence in Australia employing around 550 people and will continue to be headquartered in Melbourne,” he said.
“Despite the introduction of plain packaging and the continued growth in illicit trade, PML’s volumes were stable in 2013.”