BAT investing in glo

British American Tobacco said yesterday that it would invest €800 million during the next five years in its factory in Ploiești, Romania.
‘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,’ the company said in a press note posted on its website.
‘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 7,000 square metres 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 enhance also the cigarette-making capabilities within the factory.
“We have a long-held ambition to offer smokers a range of potentially reduced-risk products – like tobacco heating devices, e-cigarettes and oral tobacco,” Tadeu Marroco, regional director – Europe and North Africa, was quoted as saying. “This ambition has seen us launch vaping products and tobacco heating devices in 16 countries in the last five years and we’ve bold plans to increase our geographical footprint in the second half of 2018. The significant investment in our factory in Romania is testament to our commitment to offer smokers a wider range of tobacco and nicotine products – with a particular focus on potentially reduced-risk alternatives to smoking – in an increasing amount of countries.”
The factory will supply Neostiks also for the Romanian market following the launch of glo there in December. In the six months since its launch, first in Bucharest and then in 17 other major cities around Romania, almost 25,000 consumers are said to have bought glo and tens of millions of Neostiks have been sold.
In 2017 BAT said, its revenues outside of the US from e-cigarettes and tobacco heating products quadrupled to £397 million. On a full year basis including Reynolds American’s contribution, this would have been more than £500 million.
And the company aims to generate more than £1 billion revenue from NGPs by the end of 2018 and to more than £5 billion by 2022.