Earlier this week Scandinavian Tobacco Group (STG) announced the re-organization of its business into three business units, and plans to close three non-premium production facilities. Concurrently STG announced the completion of integrating Royal Agio Cigars into its business.

The three business units of STG’s organizational structure include:

• North America Branded & RoW (Rest of World): This unit will now be headed up by Régis Broersma and General Cigar Company falls under this business unit. As we reported, Broersma will now continue as head of General Cigar. He had previously commenced a move to STG’s Smoking Tobacco and Accessories Division while still running General.
• Division Europe Branded (formerly Region Machine-Made): This will be headed by Jurjan Klep.
• North American Online & Real Division (NAOR): This division is unchanged except for the move of the cigar wholesale business to North America Branded & RoW. This unit will continue to be headed by Sarah Santos.

STG’s Smoking Tobacco and Accessories Division will be split between North America Branded & RoW and Division Europe Branded.

STG also announced plans to consolidate its production operations. The company will announce that over the next 9 to 18 months it will close production facilities in Eersel and Duizel in the Netherlands. STG also announced it is closing its production facility in Moca in the Dominican Republic. It is expected the company will lay off 800 employees. These facilities are focused around non-premium cigar production. The Duizel facility came from Royal Agio Cigars.

In a press release CEO Niels Frederiksen commented: “The changes we announce today are a step further in our transformation of Scandinavian Tobacco Group. They impact most parts of our organisation as we build a more competitive and profitable business with a powerful brand portfolio, strong market positions and robust supply chains. It is an investment in our future and addresses the need for continuous optimisation to remain competitive and succeed in tough market conditions. Regrettably, the changes also necessitate that we part ways with a number of hard-working and valued colleagues. I would like to thank everyone of them for their efforts and dedication over the years.”