Factory Closures

British American Tobacco PLC
13 July 2005



               UK and Ireland announce factory closure proposals



British American Tobacco said today that its operating companies in the UK and
Ireland have announced that they are to initiate consultations on proposals to
cease manufacture and transfer production elsewhere.



In the UK, it is proposed that the Southampton factory will close within 18-24
months. Subject to consultations, this will result in the loss of some 530 jobs,
primarily in manufacturing.



About 450 jobs would remain on the Southampton site, within Group R&D, British
American Shared Services (BASS), and the UK supply chain. The company's tobacco
processing plant in Corby, Northamptonshire, is not affected.



In Ireland, P J Carroll & Co Ltd. is to consult on a proposal to stop
manufacturing at its cigarette factory in Dundalk, Co. Louth, employing 66
people.



Today's announcements come as a result of separate reviews into the prospects
for both factories. Regrettably, both reviews have concluded, subject to
consultations, that there is no viable future for either.



The Southampton operation, which manufactures primarily for export, announced
last month that 25% of its production would be localised to factories in
Singapore and Korea.



The Dundalk factory manufactures largely for the Irish market and is currently
operating at only 45% of its capacity. Industry volumes in Ireland have been
adversely affected by increases in excise tax on cigarettes as well as the
public places smoking ban.



Allan Short, Head of UK&I Operations, which manages both facilities said: "This
is a very difficult time for all of us. We intend to start consultations
immediately, and we are committed to doing all we can to mitigate the impacts of
any job losses.



"Regrettably higher costs in western Europe and the increasing trend towards
local production have combined to turn the tide against our manufacturing
operations in the UK and Ireland."



Today's proposals would create combined restructuring charges of approximately
£160 million, the majority of which, it is anticipated, would be charged in
2005.  Annual savings, once full benefits have been realised, would be
approximately £40 million.



                                   ENQUIRIES



British American Tobacco Press Office            Investor Relations
David Betteridge/Teresa La Thangue/Emily Brand   Ralph Edmondson/Rachael Cummins
44 (0) 207 845 2888 (24 hours)                   44 (0) 207 845 1180 or 1519


Note to editors:



  • British American Tobacco, the world's second largest publicly quoted
    tobacco group, does business in 180 markets. Its portfolio of more than 300
    brands include leading international brands such as Lucky Strike, Kent,
    Dunhill and Pall Mall.



•         The Group has 81 cigarette factories in 64 countries, producing some
853 billion cigarettes in 2004 (including the make-your-own cigarette 'stix').
The Group also has 9 Other Tobacco Products (OTPs) factories in 7 countries
which manufacture cigars, roll-your-own and pipe tobacco. Our companies,
including associated companies, employ more than 90,000 people worldwide.



Southampton:

  • UK & Ireland Operations, based in Southampton, manufactures and supplies
    cigarettes for the home and export markets. About 90% of all production in
    the Southampton factory is for export, mostly to countries outside the EU.
    Key brands include Lucky Strike, State Express 555, Dunhill and Rothmans.



  • British American Tobacco directly employs about 1,000 people at its
    Southampton site, including 652 people within UK operations. This comprises
    some 530 in manufacturing, 80 in supply chain and 40 in support services.
    Also on site, the Group R&D centre and the BASS organisation - which are not
    part of the UK Operations - employ some 220 and 120 people respectively.



  • The factory has a fully installed capacity of up to 50 billion cigarettes
    per year. Current volume is approximately 24 billion. Future volume
    (following localisation of some production to the Far East, and
    implementation of the EU export ban) would be below 14.5 billion.



  • British American Shared Services (BASS) - based in Southampton and
    Brussels - provides finance transactional services (e.g. invoice processing
    and general accounting) to markets in Western Europe. The Southampton branch
    deals with transaction processing.





Dundalk:

  • PJ Carroll & Co Ltd. became part of British American Tobacco following the
    1999 merger with Rothmans International.



•        Its cigarette manufacturing facility in Dundalk, Co Louth, Ireland, is
managed by UK&I Operations. Key brands include Carroll's No 1, Major and Sweet
Afton. It currently makes about 0.8billion cigarettes per year.


                      This information is provided by RNS
            The company news service from the London Stock Exchange