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BAT to invest about $1 billion in its Ploiesti/Romania factory by 2022

>>>The investment will support the expansion of BAT’s innovative tobacco heating product - glo

By R.Constantin
The members of the Government of Bucharest and BAT representatives have today inaugurated one of the largest foreign direct investments in Romania.
British American Tobacco (BAT), the largest tobacco company in Romania, announces it will invest €800 million (about $1billion) over the next 5 years in its factory in Ploiești. The investment, which will generate 200 new jobs in Romania, will support the expansion of BAT’s innovative tobacco heating product - glo – in countries across Europe during the second half of 2018.
A completely new manufacturing hall will be built dedicated to producing the specially designed tobacco sticks – called Neostiks – which work with the glo tobacco heating device. In total, an additional 7000 square meters of production space will be created and, once completed, the Romanian production plant will be the sole supplier of glo Neostiks across Europe, as BAT continues its ambition to transform the tobacco industry with a range of potentially reduced risk alternatives for smokers. The investment will also enhance the cigarette making capabilities within the factory.
“We’re incredibly proud that our factory in Ploiești will become a strategic European hub for producing and exporting tobacco sticks for our innovative tobacco heating device – glo. We’re ramping up production to support further launches of glo into other European countries. Our Ploiesti factory is supporting BAT’s vision of offering smokers potentially reduced risk products – like glo. This ambition, combined with our increased investment in our factory here, is supporting the creation of 200 jobs in Romania over the next five years to add to our 800-strong employees already working in our factory today,” said Ram Addanki, South Central European Area Director, British American Tobacco.
The factory will also supply Neostiks for the Romanian market following the launch of glo in December last year. In the six months since its launch, first in Bucharest and then in 17 other major cities all over Romania, almost 25.000 Romanians already bought a glo and tens of millions of Neostiks.
”The €800 million to be invested in Ploiesti over the next 5 years is proof of our commitment to Romania. Currently, 60% of our Romanian-made products leave to 45 other countries and this number will grow to 70% following these investments. We want to continue to invest in Romania and hope that the Romanian Government will provide the predictability that is essential for doing so. Since the tobacco black market is the most serious challenge to us and our investments, and also to government revenues and to consumers, it is encouraging that the Romanian government has announced plans for securing the Romanian borders by the end of the year and created a working group with the aim of identifying the best legal solutions to the illicit problem” added Ram Addanki.
The British American Tobacco Factory in Ploiesti is already one of the most technologically advanced manufacturing facilities within the BAT group at a global level, after an investment of almost 310 million EUR since the factory’s establishment almost 20 years ago. With the new production outputs, the BAT factory in Ploiesti is set to become one of the five biggest BAT manufacturing units in the world.
Glo is BAT’s tobacco heating device which heats – not burns – specially manufactured tobacco sticks (called Neostiks) to approximately 240 C°.
As there is no burning of tobacco in glo, like there is with traditional cigarettes, glo has the potential to be less risky than smoking.
The vapour formed by heating the special tobacco sticks generates a natural tobacco taste.
British American Tobacco is one of the leading investors in Romania and the second largest contributor to the Romanian state budget.
In 2017 alone, BAT has contributed with more than 1.7 billion EUR to the state budget, as excise and other taxes.
BAT has invested so far over 310 million euro in the Ploiesti factory, with over 60 million euro in 2017 alone.
With almost 800 employees, the factory in Ploiesti is one of the most important BAT manufacturing unit in the world, with more than 60% of the production in Ploiesti being exported.
In total, BAT has over 2.500 employees in Romania, with another 25.000 jobs created indirectly through the company’s supply and distribution chains.

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The Romanian Business Journal
Constantin Radut
Editor in Chief
031726 Bucharest, Romania

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