BUCHAREST, Nov 15 (Reuters) - British American Tobacco Plc (BAT) plans to expand output at its Ploiesti factory in Romania by 20 percent in 2017 after a German facility closure and to invest 1.0 billion euros over the next five years.
BAT's operations in Romania include a nationwide distribution company and a regional services firm.
"We plan to give the Romanian economy a 1 billion euro stimulus, through these three companies," Gemma Webb, general director of BAT Romania, told workers and local officials at the plant, some 60 km (400 miles) north of Bucharest.
"With the investment we plan for our factory, in 2017 it will become our group's second largest in Europe."
The factory employs 2,000, twice as many as three years ago.
BAT exports now about half of its Romanian production to 35 countries including Japan, Brazil, Russia, UK, Denmark and Italy and the expansion will allow it sell about 56 percent of output abroad.
Webb said Ploiesti would start producing "glo iFuse Neopods", produced until now in the UK.
BAT has said it plans to test a new tobacco-based cigarette alternative in Japan next month.
Glo electronically heats tobacco enough to create an inhalable vapour. That vapour, according to BAT, has about 90 percent less toxicant than smoke. The temperature of glo and the Kent Neostiks that go with it is about 240 degrees Celsius, whereas combustion in traditional cigarettes takes place at over 800 degrees, BAT says. (Reporting by Radu Marinas; Editing by Ruth Pitchford)