Tobacco Facts.

The increasing popularity of roll-your-own tobacco products has given a boost to Commonwealth Brands Inc. at a time when local competitors are cutting back on production and jobs.

The company said yesterday that it is expanding its plant in Reidsville by adding a product line for cigarette tubes, which consumers use as a device for rolling or stuffing tobacco for a less-expensive smoke.

Commonwealth said it will create 35 jobs this year, expanding its local work force to 259 employees. It also will spend $6.7 million on capital improvements.

The company, based in Bowling Green, Ky., makes discount brands USA Gold and Sonoma, as well as cigarette tubes and blended and fine-cut tobaccos. It is a wholly owned subsidiary of Imperial Tobacco Group of England.

Commonwealth has about 3.8 percent of the U.S. market share, said Bill Godshall, the executive director of SmokeFree Pennsylvania.

Frank Howell, the vice president of manufacturing for Commonwealth, said that the cost of doing business in Reidsville was the top factor in its decision to expand there, along with a cooperative relationship with the local union representing the employees.

According to the governor’s office, the new positions will pay an average annual wage of $37,571, not including benefits. The average annual wage in Rockingham County is $30,472.

The new jobs come at a time when General Tobacco Co., based in Madison, has cut its work force nearly in half to about 65 employees in response to lower demand for its discount cigarettes and its payment dispute regarding the Master Settlement Agreement.

The jobs also may prove attractive to the estimated 400 production workers who accepted a voluntary severance package from R.J. Reynolds Tobacco Co. in December. Reynolds said that while some workers left soon after receiving their package, others may not leave until year’s end.

Commonwealth is eligible for $83,300 in economic incentives from Reidsville and $81,600 from Rockingham County over three years. It has received a $100,000 grant from the One North Carolina Fund, which the governor can provide to existing companies expanding their businesses or new companies to the state.

“Commonwealth and Imperial have been investing a substantial amount of equipment in that plant the past three years,” said Graham Pervier, the president of Rockingham County Partnership for Economic Development. “This is just another one of those expansions.

“In this case, they had the option of making the cigarette tubes elsewhere, such as Virginia and Germany, so we felt it was appropriate to offer the incentive to encourage them to keep expanding here.”

By Richard Craver
February 5, 2010

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