BAT starts work on new Korea plant

British American Tobacco is investing $86 million in building a second factory in South Korea and further establishing the country as an export hub, according to a story in The Korea Times.

BAT Korea said on Friday that it would construct the new factory over the next year and a half near its existing production facility in Sacheon, South Gyeongsang Province.

“We are pleased to announce a plan to expand our production facilities, which represent an important milestone in BAT Korea’s history,” said company vice president Bae Yoon-suk during a ground breaking ceremony at the construction site Friday.

“Once the project is completed… the Sacheon factory will become an export hub for BAT’s entire global operations.”

When the second factory begins production, BAT Korea expects its annual production volume will more than double from 16.8 billion to 35.0 billion.

Next year, the company expects to earn more than $260 million from cigarette exports, up from $100 million in 2015.

“Currently, the Sacheon plant ships tobacco products to Japan, Taiwan and 11 other countries,” said Bae. “When the second factory is completed, we expect to conduct business in new foreign markets.”

The plan is for BAT Korea to be exporting about 70 percent of its production in 2018, up from the current 43 percent.

Since the Sacheon facility began exporting cigarettes in 2004, it has been serving as BAT’s main production base in the Asia-Pacific region.

“Among BAT’s 44 plants in 41 countries, the Sacheon factory has ranked highest in product quality and productivity since 2003,” Bae said.

“The plant has proven its excellent production capacity by reaching an accumulated production of 100 billion cigarettes in just seven years. Recently, it exceeded an accumulated production of 200 billion cigarettes. Such a level of exceptional productivity is the result of achieving a win-win partnership between management and labor union.”

The company’s expansion is expected to help revitalize the regional economy by hiring more than 100 new employees and increasing business dealings with local suppliers.

“BAT Korea prioritizes securing local talent when it comes to hiring for the Sacheon factory,” Bae said. “With approximately 90 percent of our 360 employees born in Sacheon or in nearby areas, we are known to be the most local-friendly company.”