Philip Morris International said Wednesday it plans to invest $150 million or about P8.8 billion in local affiliate PMFTC Inc. to open manufacturing lines that will produce heated tobacco sticks for smoke-free products.
The investment marks the first major investment in the cigarette category in the Philippines by a tobacco multinational company.
“We are proud to invest in the country’s journey to finally rid society of cigarettes, by providing those who would otherwise continue to smoke with better alternatives, while helping generate revenues for the government and livelihood opportunities to the people,” said PMFTC president Denis Gorkun.
PMI said the investment would span a two-year period and could generate up to 220 new specialized jobs to support the local tobacco growing industry. It will include an expansion wing at PMFTC’s state-of-the-art factory in Tanauan City, Batangas. Actual commercial production is expected to start in the fourth quarter of 2023.
PMI said it approved the inclusion of locally-grown tobacco in the production of heated tobacco sticks. This is expected to help sustain the livelihoods of Filipino tobacco farmers and sari-sari store owners, it said.
“Through PMI’s continued investment in research, development and production, we can now heat tobacco in a way that is satisfying to adult smokers. Using sophisticated electronics, IQOS precisely heats specially designed tobacco units just enough to release a flavorful nicotine-containing vapor,” Gorkun said.
PMFTC launched the IQOS tobacco heating system, PMI’s flagship smoke-free product, in the Philippines in 2020. IQOS devices use a patented HeatControl technology that precisely heats, without burning, tobacco-filled sticks wrapped in paper called Heets to release a water-based aerosol. Unlike cigarettes, IQOS does not burn tobacco and therefore produces no smoke and no ash.
PMFTC is an agriculture and consumer products company that’s leading change across the Philippine tobacco industry.
A business combination between LT Group Inc. and PMI, PMFTC is an employer of choice, a major leaf buyer and taxpayer and a partner to law enforcement.
PMI is building a future on a new category of smoke-free products that, while not risk free, are a much better choice than continued smoking due to the elimination of combustion—the primary cause of smoking-related problems.