Industryweek 6438 Philip Morris International 1

Philip Morris Shuts Australian Plant, Blames Regulation

April 2, 2014
Saying that a government policy in 2010 to reduce the fire risk posed by Australian-made cigarettes had affected their popularity in export markets, the company is moving production to South Korea.

SYDNEY -- Philip Morris (IW 1000/50) on Wednesday announced the closure of its only Australian manufacturing plant with the loss of 180 jobs, blaming regulations for limiting its export opportunities.

The firm, which makes the Marlboro brand, said its cigarette factory at Moorabbin in Victoria would close by the end of the year after six decades of operation.

The closure is the latest blow to the Australian manufacturing sector after the country's car manufacturers Ford, Toyota and General Motors Holden all announced their plants will close with an estimated 50,000 job losses in the sector.

Philip Morris Limited's (PML) Australasian managing director John Gledhill said production would be moved to South Korea.

He played down the impact of world-first plain packaging laws which were introduced in Australia in December 2012 but said a government move two years earlier to reduce the fire risk posed by Australian-made cigarettes had affected their popularity in export markets.

"Despite the introduction of plain packaging and the continued growth in illicit trade, PML's volumes were stable in 2013," he said.

"However, with any significant export opportunity restricted by Australian government regulations, our Moorabbin factory is significantly under-utilized, operating at less than half of its currently installed capacity."

The announcement of the closure came on the same day that BP Australia said its Bulwar Island refinery in Brisbane will shut down in mid-2015, costing 380 jobs

Copyright Agence France-Presse, 2014

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