SACHEON, South Gyeongsang Province -- British American Tobacco Korea has forecast that its export of cigarettes will double after its second factory is completed in January.

BAT officials unveiled the outlook during a groundbreaking ceremony Friday at its factory in Sacheon, South Gyeongsang Province, for its second building. 

They said the second factory, set to open in January next year, is expected to more than double the Sacheon facility‘s production from the current 16.8 billion cigarettes to 35 billion cigarettes.

The BAT group invested $86 million into the construction of the new building. The new facility will house another set of second manufacturing department equipment.

While the primary manufacturing department is responsible for processing the tobacco leaves themselves, The SMD is where the tobacco is turned into actual products.

The additional capacity will be focused on exported products, rather than products sold here in Korea.

The Sacheon factory creates 63 different BAT products exported to 13 different countries. More than four-fifths of export-use cigarettes produced in Sacheon is currently sent to Japan.

“After the second building goes into production, we expect to export about 70 percent of all cigarettes produced in Sacheon,” said Kwak Sang-hee, corporate affairs manager for BAT North Asia. Sacheon will also export to additional countries once the second facility is complete.

This will translate to about $260 million annually in exports, up from $100 million in 2015.

According to BAT officials, the factory in Korea is among the best in the BAT global network of 44 factories in 41 nations both in terms of quality and equipment effectiveness -- leading to rising demands for export capacity.

The new factory comes in the absence of a general manager for BAT Korea.

Erik Stoel, who was appointed to the top spot in Korea just six months ago, was moved to head up the group’s Malaysia branch last month, according to BAT officials. Stoel was tasked with stabilizing BAT’s business after a major hike in excise taxes there.

The CEO spot is expected to remain vacant until September, BAT officials said.

By Won Ho-jung (hjwon@heraldcorp.com)