Hungary expands civilian drone factory to boost EU production

SZENTENDRE, Hungary, Sept 17 (Reuters) - Hungarian civilian drone manufacturer ABZ Innovation opened a 7 million euro ($8 million) factory extension on Thursday that it said would quintuple output by the end of next year as it seeks to meet growing demand from US and European clients.

The factory, which ABZ says is one the largest civilian drone production sites in Europe, will produce 2,000 drones a year on a single shift and 3,500 on a double shift, Chief Executive Officer and co-founder Karoly Ludvigh said.

The expansion, funded by US investor Assembly Ventures, Germany's Vsquared Ventures and Hungary's Day One Capital, could help reduce reliance on Chinese manufacturing, Ludvigh said. Sales are dominated by US and European markets.

"I think the fact that we have a factory where we can output 2,000 to 3,500 industrial drones yearly is a very, very big step because before this there was almost no existing capacity to manufacture these kinds of drones," he said.

ABZ posted a 1 billion forint ($3.2 million) loss in 2025, driven by the costs of ramping up production. Ludvigh said the company, which makes heavy-duty drones for agricultural and industrial purposes, hoped to break even in a few years.

The company's drones are used for precision spraying, seed and fertiliser spreading, industrial cleaning and cargo operations, and are sold in more than 40 countries.

"The demand for drones worldwide is astonishing," said Gergely Kis, a drone technology adviser at consultancy eNET. "I think that anyone investing in this now will find that it is an investment that pays off over the long term."

However, he said slow progress in unmanned traffic management systems capable of tracking and controlling large numbers of drones was holding back growth in civilian applications in Europe.

($1 = 0.8712 euros)

($1 = 316.9000 forints)

(Reporting by Gergely Szakacs. Editing by Mark Potter)