Data provided by Romania’s National Statistics Institute show that exports of tobacco-based cigarettes reached EUR563.55 million in the first ten months of 2014, up 11% from nearly EUR506 million in the same period in 2013.
The biggest cigarette producers in Romania are British American Tobacco (BAT), which has a factory in Ploiesti, Japan Tobacco International (JTI), with a factory in capital Bucharest, and Philip Morris International (PMI), with a factory in Otopeni (Ilfov county).
Tobacco companies operating in Romania have invested heavily in boosting the capacity of their local production units, focusing mainly on exports, considering that they moved the production of closed plants to other countries.
“A big part of the production volume (over 50%) has always been exported, considering that the Philip Morris factory in Romania is one of the most effective in the region. Exports rose over 70% between 2010 and 2014. (…) Philip Morris’ production volume in Romania grew nearly 78% between 2010 and 2014, after several years of large investments in both production capacities and human resources. The increase was mostly fueled by exports because the Romanian market saw a significant decline, therefore, cigarette production for local consumption was adjusted properly,” PMI Romania representatives told MEDIAFAX.
PMI said total investments in its Romanian operations have reached $450 million so far. In 2014, PMI hired 100 people at its Otopeni factory and the recruiting process will continue in 2015, with another 40 jobs being created in the production sector.
PMI exports more than 80% of the products manufactured in Romania to Italy which is followed by Bulgaria, Albania, the Czech Republic, Slovakia, Poland and other countries in the European Union.
As regards JTI, the production volume going to export has gradually increased over the years.
British American Tobacco started in 2012 and completed in 2014 an investment of nearly EUR40 million in its factory in Ploiesti, which also entailed boosting the plant’s production capacity by 20%, according to data previously released by the company.
Italy is the main destination of Romania’s cigarette exports, accounting for nearly 72% of the total value of exports, which translates into nearly EUR402 million in the first ten months of 2014. Italy is followed Germany (EUR18 million), Poland (EUR16.5 million), Bulgaria (EUR16 million), Greece (EUR14.9 million), Austria (EUR14.3 million), Great Britain (EUR9.9 million), The Netherlands (EUR9.7 million), Bosnia and Herzegovina (EUR6.4 million) and Denmark (EUR5.1 million). Overall, the cigarettes made in Romania are exported to 57 countries, according to INS data.
According to a KPMG report, cigarette consumption in Romania was relatively stable in 2013, with legal sales falling 4% and the consumption of smuggled and counterfeit cigarettes growing 15%.