New EUR 1.4 Billion Foreign Investment Announced

President of Huayou Cobalt, Chen Hongliang (L) with Foreign Minister Péter Szijjártó

China’s Huayou Cobalt is creating 900 new jobs with a huge investment of some 520 billion forints (EUR 1.4 billion) as it builds its first European plant in the small northern town of Ács, where it will produce cathodes for electric batteries, Minister of Foreign Affairs and Trade Péter Szijjártó announced on Wednesday.

The minister said that the high-tech company, which specializes in the development and production of lithium-ion batteries and new cobalt materials, will have a capacity of around 100,000 tons per year. The investment, worth around 520 billion forints, will create 900 new jobs with financial support from the state, but the amount will only be disclosed once it has been approved by the European Commission. He stressed that the value of the investment exceeds one billion dollars, of which there were 159 in the world last year, and that this is the second announcement of similar volume in Hungary this year.

Huayo Cobalt is bringing absolute high-tech to Hungary, so that progressives can understand high-tech,”

he said, welcoming the fact that the company will also launch training programs for its employees. “We have been negotiating for almost two years to bring this investment to Hungary. It was an international competition. There were quite a few other European countries,” he said.

Péter Szijjártó also touched on current difficulties, recalling that the world economy has been turned upside down twice in the last three years. He stressed that in this extremely uncertain situation, there was one process that was moving forward uninterruptedly at the same speed, and that was the revolution in the automotive industry.

The dye is cast (…) Factories linked to the electric car industry will definitely come into being. The question is where. The question is which countries will be successful in this new global economic era, which countries will be able to extract the most benefits for themselves,”

the Minister said. In this context, it was a question of “economic destiny” as to which countries could succeed in the fierce competition for investment in the sector, in which he said all or almost all means would be used. He pointed out that Western car manufacturers are heavily dependent on electric batteries from the East, a market dominated by China, South Korea and Japan (95%). “Europe can only succeed in this new global economic era if instead of artificially separating the Eastern and Western economies, it seeks to ensure that the Eastern and Western economies work as closely together as possible,” he warned. He said Hungary was an excellent example of this, having benefited greatly from being an important meeting point for Eastern and Western companies. “This makes Hungary indispensable and inescapable for the economic development of Europe in the years to come,” he added.

The minister also pointed out that without a sufficient electric battery factory, it would not be possible to meet environmental targets, and Hungary already has the fourth largest production capacity in the world in this field. “This is not a new phenomenon, as evidenced by the fact that in the last seven years, fifty-one investments worth four thousand billion forints have been made in Hungary in the electric car sector,” he said, adding that four of the ten largest companies in the sector had already committed to Hungary. “This would not have happened without the policy of opening up to the East. It would not have worked if Hungary had not been able to provide the best investment conditions for Chinese companies,” he said. He added that after 2020, Chinese companies will continue to bring the most investment to Hungary this year, and the momentum seems to be continuing. Finally, he said that Hungarian-Chinese trade last year reached a record 13 billion euros, and it is already certain that this year will be another record, as last year’s record investment (6.5 billion euros) is expected to double in 2023.

The strategic positioning of the new planned factory in Ács is no coincidence, as it is only a few miles away from the town of Győr, where German car maker Audi’s factory is based. Another reason for the location is that it is only a stones’ throw from the regions of Slovakia, where most of the Hungarian speaking minority lives, which in turn could help in attracting fresh workforce.

Huayou Cobalt already has ties to the European car industry, running a joint project with German car manufacturer BMW in China. As BMW wrote on their website, the “BMW Group is… expanding its use of secondary material in closed recycling loops. For the first time in China, the BMW Brilliance Automotive joint venture (BBA) has established a closed loop for reuse of the raw materials nickel, lithium and cobalt from high-voltage batteries that are no longer suitable for use in electric vehicles.”

Via KKM, Featured Photo: Facebook Péter Szijjártó