MORE than 1,200 workers at Southampton's cigarette factory have been reassured that there are no plans to shut down the factory.

British American Tobacco raised the prospect of closures across its 65 sites worldwide to reduce costs by one third of a billion pounds.

The multi-national dropped the savings target bombshell at the same time as revealing annual profits of £1.9 billion.

It immediately raised concerns that the Millbrook plant may be in the firing line.

Southampton is BAT's only production facility in the UK, where manufacturing costs are higher than other BAT production centres outside of Western Europe.

But, as reported in later editions of the Daily Echo, BAT's UK operations boss brought a swift end to the sudden uncertainty.

Allan Short said: "There are no plans to close the Southampton factory. Our focus is on continuing to improve our competitiveness.

"Matters such as overcapacity and cost competitiveness are constantly under review and people are bound to speculate, but we have to focus on delivering to our customers."

Mr Short, a familiar figure at the 26-acre site in Southampton, also said BAT is working towards ensuring it can produce the majority of its products with a lower strength tar content.

From January 2007, the EU will ban the export of high-tar cigarettes for health reasons.

The statement from Mr Short received a mixed reaction from Mike Budd, the regional officer for Amicus, which has 400 union members at the local plant, many of whom are machinery operators.

He said: "It's a relief for us, but that is tempered with caution. We don't believe any of the factories will be unaffected by the cost cutting. It could have some impact upon Southampton."

The Millbrook plant produces 25 billion cigarettes a year, with brand names like Dunhill, Lucky Strike and Rothmans. Markets include China.