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Loose Tobacco Maker to Add a New Product Line

Published on February 22, 2010 6:51 AM

The outstanding demand for fine cut tobacco brands across the United States has triggered an increase in Commonwealth Brands Inc. market share, while major American tobacco companies are laying off workers and shutting down plants.

Commonwealth spokesman declared last week that it is currently extending its manufacturing unit in Reidsville, a small city in North Carolina, by launching another product line involving production of cigarette tubes, which smokers use in making their own cigarettes in order to get a low-cost smoke.

The company added it would open 35 work places in 2010, rising the number of local employees working at the plant to 259. The tobacco-maker would as well invest some $6.7 million on machinery and technical innovations.

Commonwealth, headquartered in Bowling Green, KY., is a subsidiary of Imperial Tobacco Inc, the fourth-largest tobacco company in the world. The production is oriented on low-cost tobacco products, among which USA Gold, Sonoma and Fortuna are the best-selling products. The company also makes cigarette tubes and loose tobacco, including Bali Shag, McClintock, Premier, and Rave brands.

According to a recent market research, Commonwealth Brands Inc. holds around 4 percent share of U.S. tobacco market. Jonathan Cox, the chief executive officer for Commonwealth, admitted that the moderate cost of opening and conducting a business in Reidsville was the primary reason in their willingness to expand production in the plant, as well as the trust relationship the company has established with local labor union.

The Reidsville Mayor’s office has confirmed that new jobs will have an average yearly salary of $37,571, excluding benefits, whereas the average wage across the City is $30,472.

The new work places are created approximately at the same time when another tobacco company, Madison-based General Tobacco Co., has fired nearly 50 percent of its employees to around 65 workers, trying to offset the drop in sales of its discount tobacco products and payments to Settlement Fund.

The positions as well may be nice opportunities for nearly 400 former employees of RJ Reynolds, who agreed voluntary to take a severance package from the company last year. The Camel-maker admitted that many employees have left the company shortly after getting the package, while others decided to continue working till the end of the year.

Commonwealth is qualified to receive $83,300 in economic stimulus from Reidsville and another $81,600 from Rockingham County during the next several years. The company as well has already got a $100,000 incentive from the One North Carolina Fund. The Fund has been established to provide economic boost for new or already operating businesses.

Anne Davis, a spokesperson for the Rockingham County Partnership for Economic Development said that Commonwealth and its owner, Imperial Tobacco have been spending a substantial sum of money on innovating that manufacturing unit in the last 2-3 years.

She added that they thought it would be reasonable to provide Commonwealth with that economic incentive to encourage them to continue expanding the production on Reidsville, since they could establish the production of cigarette tubes in other plants, for instance in Virginia, or somewhere in Europe, but chose to do it in that plant.

Loose Tobacco Maker to Add a New Product Line

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