BRITISH American Tobacco (BAT) has launched a cost-cutting programme in an attempt to take £200m off operating costs over the next five years.

The announcement came on the back of BAT's decision to carry out a share buy-back programme, which could reach close to £1bn.

The company yesterday said it was too early to say whether or not this would involve job cuts.

The cigarette firm employs 70,000 people worldwide, at sites including Darlington, Southampton and London.

Engineering union Amicus said it feared for the safety of any manufacturing job in the current economic climate, but added that there was no indication that cutbacks would be forced upon the Darlington plant.

Gerry Hunter, Amicus regional officer, said: "If the likes of Ford can move manufacturing to Poland, Dyson and Electrolux to China, and BT can talk about moving to India, then it is fair to say nobody's job is safe in manufacturing or the service sector.

"Rothmans in Darlington is a highly effective and efficient production unit.

"It has changed and met all the company's programmes. We have room for extra capacity, not less."

Tom Roberts, BAT spokesman, said the cost-cutting review was a global issue.

"We have 90 factories across the world and we are looking across all areas to see if, through better information technology and better ways of reducing lead times, we can reduce costs."

The group yesterday reported to the City that pre-tax profits rose two per cent to £2.11bn, although operating profits, stripping out one-off items, fell three per cent to £2.68bn after being hurt by the weaker US dollar.

Turnover was affected by tougher economic conditions and a planned reduction in duty-free sales, and fell from £25.69bn to £24.68bn.

The group said it was raising the total dividend to 25.2p, up ten per cent on the previous year.

Anthony Platts, assistant director at North-East stockbrokers Wise Speke, said growing awareness of the danger of smoking would pose BAT problems.

He said: "The glamour from their products is diminishing as some of the more harmful effects are highlighted."