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RICHMOND, Va. — Altria Group Inc. is consolidating select manufacturing facilities of some of its operating companies in a move to streamline operations and achieve greater efficiencies.
In its third-quarter earnings release, the Richmond-based company said John Middleton Co. will transfer its operations in Limerick, Pa., to Altria's manufacturing center site in its hometown.
In addition, U.S. Smokeless Tobacco Co. will transfer its Franklin Park, Ill., operations to its Nashville, Tenn., facility and the manufacturing center site in Richmond.
During the tobacco company's third-quarter earnings call on Oct. 27, Chairman, CEO and President Marty Barrington said employees affected by the consolidation will have the opportunity to transfer into available positions. The consolidation is expected to be completed by the first quarter of 2018 and deliver approximately $50 million in annualized cost savings by the end of 2018.
"We remain focused on simplification and cost management to improve our core businesses and invest in future growth initiatives," he explained.
The consolidation follows the productivity initiative Altria launched in January, as CSNews Online previously reported. The company said it still expects the initiative to deliver approximately $300 million in annualized productivity savings by the end of 2017.
The savings will come from a leaner organization and reduced spending on certain selling, general and administrative infrastructure, Barrington noted when announcing the initiative in earlier this year.
Altria Group Inc. is the parent company for Philip Morris USA, John Middleton, U.S. Smokeless Tobacco Co., Nu Mark and Ste. Michele Wine Estates. The brand portfolios of Altria's tobacco operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, MarkTen and Green Smoke.