“Hungary, together with Central Europe, has become the engine of growth on the continent, in which a major role has been played by rural cities”, Minister of Foreign Affairs and Trade Péter Szijjártó declared on Monday in Pécs.

At the inauguration of the new plant of one of the world’s largest tobacco industry companies, British American Tobacco (BAT), realised with an investment of 7.5 billion forints (EUR 21.1 million), the Minister said: “In addition to local capabilities, the unparalleled growth has been assisted by Hungary’s corporation tax and personal income tax rates, which are the lowest in Europe”. “Today, Hungary has a European Champion rate of economic growth, with the GDP growing by 5.1 percent during the first six months of this year”, he added.

The Minister highlighted the fact that Hungary’s large rural cities have never before played such an important role in increasing the performance of the Hungarian economy. He said that in his opinion the increase in the capital attraction capability of cities that are county or regional centres is partly due to the establishment of industrial parks, and also thanks to local secondary and higher education training courses.

“The reindustrialisation of Pécs has been given major impetus during the past 18 months, and the business tax revenues of the county capital have increased by 10 percent thanks to the new investments that have been realised in the city”, Mr. Szijjártó highlighted. “In Baranya County, the companies operating here decided on 23 billion forints (EUR 68.3 million) worth of new investments during the first quarter of this year alone, which represents an increase of 44 percent compared to the similar period last year”, he added.

In his speech, the Minister said it was an honour that one of the world’s largest corporations “cast its vote in favour of Hungary and the Hungarian people when it also brought its latest investment here, with which is has created 100 new workplaces”.

“One of the positives of the investment is that the new product BAT will be producing in Pécs represents innovative technology that does not pose the same level of health risk as traditional tobacco products”, he highlighted.

The Minister also mentioned Brexit with relation to the British-based company, expressing his hope that the European Union will continue to maintain the closest possible cooperation with Great Britain in future, in view of the fact that “the United Kingdom is Hungary’s 11th most important trade partner and 6th largest investor”.

Member of Parliament for Pécs Péter Hoppál (Fidesz-KDNP)  said that with the launch of the Modern Cities Programme, Prime Minister Viktor Orbán had made it clear that “the Government will be supporting the reindustrialisation of Pécs using all possible means”, and BAT is one of the city’s largest and most important partners in this process. “We all have an interest in Pécs reinforcing its role as a regional centre so we can serve a developing and successful city”, he added.

BAT’s Director of Production for the European and North African Region Berndt Meyer said Pécs was chosen as the site of the new investment for several reasons. The first is the broad professional expertise with which the Hungarian colleagues are enabling the production of three, and now four, totally different types of products, he said.

BAT’s Director for the Northern and Southern European Subregion Sacha Ruffier highlighted the fact that the company’s new products “offer a potentially less harmful alternative for adult smokers”, and with the production of another type of smoke-free product Hungary is further increasing its key role in the transformation of the tobacco industry.

According to the written summary provided to the press, British-American Tobacco is one of the world’s leading tobacco industry companies, is present in over two hundred countries and also plays an important role within the Hungarian economy.

According to the company, the opening of the new production unit represents a new chapter for the Hungarian tobacco industry. The historic factory in Pécs has been expanded by the first unit in Hungary built to manufacture potentially lower risk nicotine pouches. The factory is currently operating with a single production line, but the installation of 5 further production lines is planned by the end of 2020.

The company highlighted that BAT’s goal if for the plant in Pécs to be one of the world’s largest nicotine pouch production units by the end of the development project. The products will be largely produced for export, targeting the Northern European, as well as the German, Austrian, Czech and Swiss markets. The plant’s production volume will be increasing to 350% of its current level, according to plan.

BAT is committed to playing a leading role in the transformation of the tobacco industry, the goal of which is to decrease the harmful effects linked to smoking, the company highlighted. The company group is working with over 1500 researchers worldwide to develop innovative, next generation products, and has registered over 1600 patents since 2015.

The company explained that the smoke-free product category increases the range of products that are potentially less harmful than traditional cigarettes. In this case, nicotine enters the body via a pouch that is somewhat similar to a tea bag. The nicotine pouch may contain white tobacco, but some variants are totally free of tobacco and include, amongst others, nicotine and microcrystalline cellulose.

The 110-year old Pécs tobacco Factory was purchased by British-American Tobacco in 1992, and since then the company has invested 40 billion forints (EUR 120.5 million) in the Baranya County plant. The company’s Hungarian subsidiaries, BAT Pécs Tobacco Factory Ltd’s two plants in Pécs, the historic Pécs Tobacco Plant and the Cigarillo Plant, have increase their staff from 600 to 800 and currently supply thirty markets worldwide. Last year, the company achieved 138 billion forints (EUR 416 million) in turnover, following 116 billion (EUR 350 million) in the previous year, while after-tax profits increased to 5 billion forints (EUR 15 million) from 2.8 billion (EUR 8.44 million) in 2017.

(Ministry of Foreign Affairs and Trade/MTI)