Business

Chesapeake has said it will not make major cuts at its UK tobacco packaging sites despite announcing in August that it expects to lose most of its global packaging work with British American Tobacco (BAT) by next summer.

Chesapeake made the statement following the admission at the beginning of August by its chief financial officer, Joel Mostrom, that it would cut jobs in its tobacco packaging operations. His comments came as the group reported its second-quarter results.

Chesapeake, the US company that owns Field Group in the UK, employs 90 people at its tobacco packaging site in Portsmouth and 82 people at its operation in Bradford.

The company lost its contract for carton blank work with BAT following the closure of BAT’s Southampton factory in January this year.

However, the carton manufacturer has continued to do shoulder box work and reel-to-reel wraps for BAT at Portsmouth and Bradford.

Field Group communications manager Bob Houghton said: “Certainly [there are] not going to be any changes at Portsmouth or Bradford. We’ve developed new business to help offset the loss of BAT business there.”

Chesapeake announced in March that it was “aggressively pursuing cost-saving opportunities” in tobacco packaging and alternative business in other markets, such as pharmaceuticals and healthcare, to offset the loss of the BAT work. The BAT business accounted for approximately 8% of Chesapeake’s paperboard packaging revenues in 2006.

Chesapeake is one of the few packaging businesses in the UK that still use gravure presses, which are employed at both sites.

The company has been working with BAT, packaging its tobacco products, for more than seven decades.

After it closed its Southampton facility in January, BAT moved most of its work out of Western Europe.