By Roshan Thomas

Feb 13 (Reuters) - Australian packaging company Orora Ltd ORA.AX said on Thursday it plans to close one of its furnaces and shift some production abroad due to a slowdown in the domestic commercial wine market, sending its shares to a six-month low.

The decision underlines the structural decline in the local commercial wine market, with domestic consumption falling at a faster rate than export growth to China.

Orora cited cost-of-living pressures, a shift away from beer, and increasing energy and labor costs as additional headwinds.

The glass bottles manufacturer said it would close the G1 furnace at its Gawler site in South Australia in the second half of 2025 calendar year, transitioning from a three-furnace to a two-furnace operation.

"Some production volumes will be redirected to the Ras Al-Khaimah site in the UAE to meet customer demand," Orora said in a statement.

The stock fell as much as 11.1% to A$2.080, posting its biggest intraday percentage drop since April 2 last year.

"A key point for the call (closure of G1 furnace) will likely be additional remediation costs," analysts at Jefferies said in a note.

Orora plans to invest in modernising its Ghlin manufacturing site in Belgium, which will become the primary production site for European wine and champagne bottles, freeing up capacity at its Ras Al-Khaimah site for the Australasian and U.S. markets.

The glass bottles maker reported first-half underlying earnings before interest and tax of A$120.8 million ($75.92 million), missing a Citi consensus of A$128 million.

Analysts at Citi called the earnings as a challenging result and said it would "take some time to digest (the results) in the near term".

($1 = 1.5911 Australian dollars)

(Reporting by Roshan Thomas in Bengaluru; Editing by Subhranshu Sahu)

((Roshan.Thomas@thomsonreuters.com))