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November, 2008

U.S. Tobacco Cooperative

Back to the Future:
Filtrona’s New Plant in Hungary
By Peter Cockle

Filtrona looks for the future in the Eastern Europe.

For anyone who read the article earlier this year in this magazine on the re-branding of Filtrona, it may have registered that the (not-so) humble filter was invented in Hungary by a chap called Boris Aivaz in 1925.

His was a crêpe filter, a concept so revolutionary that it immediately attracted the attention of the Bunzl family whose paper factory in Ortmann, Austria, recognized the potential of this diminutive disposable wonder. They persuaded Aivaz to decamp to Austria in order to develop this novel idea into becoming a commercial reality. Subsequently Bunzl, who later moved to England and renamed the company first Cigarette Components, and then Filtrona, exploited the concept to great effect.

Their burgeoning success saw the opening of many units around the globe some of which, for operational reasons have closed their doors, but others have sprung up and blossomed to evolve with an ever-changing market place.

As the demand for tobacco products in Western Europe has slowly shrunk back, many manufacturers have looked further east to establish a foothold in the growing markets of Eastern and South Eastern Europe. Filtrona has historically been a big player in these countries with exports coming principally from Austria, Germany, and the UK, and so inevitably, with cost considerations, their thoughts began to focus on this theatre once more.

Demand for filter cigarette sales in Western Europe has slipped 15% in the last 10 years, and for some of the specialty products, such as mentholated cigarettes, the figure is even more dramatic showing a fall of 20%. Conversely, Eastern Europe filter cigarette sales have grown 60%, and menthol sales are up 230% in the last 10 years. Carbon filter sales are increasing in both East and West Europe so it was anticipated that wherever was chosen would have to sport enough latent talent to keep up with the newer cleaner carbon rod-producing processes.

Filtrona’s Global Operations Director, Martin Dudley, explained to Tobacco International that the plan was to establish a new factory with sufficient expansion potential to cater for a growing demand for filters and perhaps other non-tobacco products on the basis of selecting an EU location which answered all the criteria, principally: central positioning with good logistics, political stability with an attendant low-level of interference from government, both local and national; good overall communications; and access to their trading partners.

The decision to set up next door to their Austrian antecedents was not a difficult one. The site chosen was just outside Budapest; close to the airport and a few minutes drive from the beautiful city itself.

The Factory and its Team
The crucial consideration in any factory project is people, and Filtrona took great care to select a team who would adapt to their work ethic and skills as seamlessly as possible. The result, according to General Manager György Kaló, is a first year that has exceeded expectations in every area: a production of 1.2 bn rods, not one single day lost as a result of accidents, a minimal turnover of staff of which over 70% have appropriate vocational qualifications, and ISO certification within six months of start-up. By the end of this year, they will have 25 process specialists on stream which ties in with this 7000 sq.-meter factory having as many individual products as any other manufacturing unit, and a storage facility that caters for six weeks of production needs.

As with all Filtrona factories, the importance of training and quality maintenance is paramount. The in-house Q.C. (quality checking) facility boasts the most modern laboratory for product testing in addition to the on-line measuring equipment attached to most machines. All this goes on under the watchful eye of Purushotham (P.G.) Gururaj, the Global Quality Improvement manager of Filtrona Filter Products.

As you would expect as environmental awareness increases globally, Filtrona is actively investigating solutions that address sustainability, carbon footprint, and the recycling of packaging and any other manufacturing by-products. Work is continuing on the development of more environmentally friendly filters.


Tobacco International - November, 2008

SMOKE Magazine - Cigars, Pipes, and life's other desires


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