China’s Huayou Cobalt is creating 900 new jobs with a huge investment of around HUF 520 billion.The company is building its first European plant in 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 specialises in the development and production of lithium-ion batteries and new cobalt materials, will have a capacity of around 100,000 tonnes per year. The investment, worth around 520 billion forints, will create 900 new jobs and will be backed by state financial support, the size of which 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 programmes 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. I would like to underline, for the European progressives to understand, it was a European country that wanted to attract this investment,” he said.

In his speech, Szijjártó also touched on the 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 unabated at an unbroken pace, and that was the revolution in the automotive industry. “The die 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,” he said. In this context, he said 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 have become hugely dependent on electric batteries from the East, a market dominated by China, South Korea and Japan, which account for 95 per cent of the market. “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 said.

The minister also pointed out that without a sufficient electric battery factory, it is not 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 past 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 have 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 set a record of €13 billion, and it is already certain that this year will be another record, with last year’s record investment (€6.5 billion) expected to double in 2023.

A statement sent by the Huayou Group to MTI on Wednesday quoted Chen Hongliang, the group’s chairman, as saying that the current investment is the first development in the European Union. Their company is giving priority to the project in Acs, and production is scheduled to start in 2026.

With the support of the Hungarian government, a sustainable, greenfield production plant with a production capacity of 100,000 tonnes per year will be built to meet the needs of battery manufacturers such as CATL, AESC, EVE Power and LGES, with the finished products expected to be used in electric vehicles by BMW, Volkswagen and other European car manufacturers. It is of strategic importance for the Chinese manufacturer to locate in Hungary, given the fierce competition created by the European Union’s commitment to carbon neutrality. The fact that the company has chosen Hungary as the location for its European base gives the country a significant competitive advantage in the field of electromobility,” the company said in a statement.