The chronicle of Eger Tobacco Factory

On the great ship

The Company Council assumed the obligation to resolve its transformation into a limited company (in Hungarian, Kft.) within a set period of time, to accept Philip Morris and ATW as owners, furthermore to assist the efforts of future owners during the privatization process. This decision was reached on 5 April, 1991 by the Company Council based on reasons listed in the proposal. Reasons included the fact that the Eger Tobacco Factory's domestic rivals were also conducting negotiations with various multinational companies on transformation, and if they were successful the Eger Tobacco Factory could lose out. In addition, the factory couldn't expect an investment from the Hungarian State as owner to the tune of billions of forints to upgrade competitiveness. A further important reason was that more than 65% of the total cigarette output of the Eger Tobacco Factory was from licenced cigarettes, and that meant the factory was at the mercy of its licence partners. The Sopianae cigarette manufactured under licence accounted for nearly half of overall production. Until that date this licence contract had been renewed annually, but if the factory were to lose the contract there was no own domestic brand to replace the loss in production. 36.2% of the factory's taxed profit originated from the production of Philip Morris brands, amongst them Marlboro, the world's leading cigarette brand. The resolution of the Company Council accepted Philip Morris - ATW as 100% owners. There didn't appear to be a better alternative in the light of the more than USD 30 million in investments over and above the purchase price paid directly to the state.

Following the April decision of the Company Council the management of the factory and Philip Morris worked in close cooperation and conducted talks with the State Property Agency in the interest of the earliest possible conclusion of the business deal. Over the summer we received regular visits from the future owners, and ever more frequently a grey-haired, tall and lean English gentleman made an appearance. Introducing himself as Gregory Courtier, we pronounced his French-like name in the French manner for quite a while! Nobody knew exactly who he