WINSTON-SALEM, N.C. -- Addressing efficiencies and cost effectiveness in an evolving market, operating companies of Reynolds American Inc. are consolidating manufacturing operations for the Vuse Digital Vapor Cigarette.
Currently, certain production of Vuse cartridges is done for R.J. Reynolds Vapor Co. at a contractor’s facility in Kansas, in addition to in-house production at R.J. Reynolds Tobacco’s manufacturing facility in Tobaccoville, N.C,
In late September, all production of Vuse shifted to the Tobaccoville facility, pursuant to a services agreement between R.J. Reynolds Tobacco and RJR Vapor.
“Vuse is currently the top-selling electronic cigarette in the convenience store channel, and we are very pleased with its success to date,” said Susan M. Cameron, president and CEO of Reynolds American. “As the vapor category continues to develop, we need to make sure our manufacturing operations are efficient and cost-effective in meeting anticipated demand.”
In May of last year, Reynolds American announced a multi-million dollar investment for higher-speed, more efficient e-cigarette manufacturing equipment at R.J. Reynolds Tobacco’s Tobaccoville manufacturing center. The new equipment is now online, enabling R.J. Reynolds Tobacco to consolidate Vuse manufacturing, reducing its manufacturing footprint and generating cost efficiencies.
As a result of the consolidation, in the third quarter, Reynolds American expects to take asset impairment and exit charges of approximately $100 million, on a pre-tax basis, it said.
“We look forward to what the future holds for Vuse,” Cameron added. “Reynolds American and its operating companies are shaping their future success through leadership in innovation, efficiency and speed to market—as we redefine enjoyment for adult tobacco consumers and achieve market leadership in a transformed industry.”
Winston-Salem, N.C.-based Reynolds American Inc. is the parent company of R.J. Reynolds Tobacco Co.; Santa Fe Natural Tobacco Co. Inc.; American Snuff Co. LLC; Niconovum USA Inc.; Niconovum AB; and R.J. Reynolds Vapor Co.
R.J. Reynolds Tobacco's brands include Newport, Camel and Pall Mall cigarettes; American Snuff's brands include Grizzly and Kodiak smokeless tobacco products; Santa Fe Natural Tobacco manufactures and markets Natural American Spirit 100% additive-free natural tobacco products, including styles made with organic tobacco; Niconovum USA and Niconovum AB market nicotine replacement therapy products in the United States and Sweden, respectively, under the Zonnic brand name; and R.J. Reynolds Vapor manufactures and markets Vuse electronic cigarettes.
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