RICHMOND, Va. — Tobacco company Reynolds American Inc. said Friday it will close two cigarette plants — one in its headquarters city in Winston-Salem, N.C., and another in Puerto Rico — as it adjusts to declining demand for cigarettes.

The nation’s second-largest cigarette maker said production of cigarettes such as Camel and Pall Mall will start to shift to its largest facility in nearby Tobaccoville, N.C., this summer. Workers at the Winston-Salem plant will transition to the other facility.

In December, Reynolds offered buyouts to about 1,800 workers at the North Carolina manufacturing plants to cut costs. About 400 workers opted to take the offer. Most of the reductions were scheduled to take place in 2010 and begin as early as January, and others will have release dates in early 2011.

Reynolds said about 60 jobs in Puerto Rico will be eliminated in the consolidation, but distribution operations in Puerto Rico are not affected by the plant closure, the company said.

Reynolds American also said Friday that it will expand its smokeless tobacco processing and manufacturing capacity at facilities in Memphis and Clarksville, Tenn. The maker of Kodiak and Grizzly smokeless tobacco said the two plants will be fully operational by early 2012. Its current plant in Memphis, built in 1904, will close the same year. Workers at that plant will be moved gradually to the new facilities.

Reynolds American and other tobacco companies are focusing on cigarette alternatives — such as snuff and chewing tobacco — for future sales growth as tax increases, smoking bans, health concerns and social stigma make the cigarette business tougher.

In the first quarter, Reynolds said it sold 2.5 percent fewer cigarettes than a year earlier, when retailers and wholesalers cut their orders ahead of a one-time federal tax on inventory. Adjusting for those cuts, cigarette volume declined 4.8 percent.


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