News has emerged of another industrial shutdown in Hungary. Japan’s Nippon Paper will suspend operations at its Hungarian subsidiary, Nippon Paper Chemicals Europe Zrt., effective December 31, Magyar Nemzet reported. The Vácrátót plant (located about 35 km northeast of Budapest) was established in 2022 to manufacture and sell carboxymethyl cellulose (CMC), which is used in the production of lithium-ion batteries, and local operations began in 2025.
The Japanese company attributed the decision to a slowdown in the growth of the electric vehicle market, changes in the regulatory and subsidy environment in Europe and North America, and intensifying competition. According to the company,
it had attempted to attract new customers and improve the cost competitiveness of the Vácrátót operation,
but concluded that, under current conditions, the Hungarian business unit is unable to generate a stable return commensurate with the investment.
CMC production will therefore be relocated back to Japan.
Nippon Paper is recording an extraordinary loss of approximately 5 billion yen (approximately 10.1 billion forints) in connection with the suspension of operations. The Vácrátót company had 24 employees at the end of August.
The recent developments are also noteworthy because the investment was specifically based on the boom in the electric vehicle and battery industries. Based on previous information from Nippon Paper’s Hungarian division, the Vácrátót plant aimed to create approximately 60 new jobs and officially opened in May 2025.
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Via Magyar Nemzet; Featured photo: Pexels