PMI eyes use of Philippines tobacco in smoke-free products

MANILA, Philippines — Philip Morris International (PMI) plans to use locally produced tobacco leaves in its smoke-free products following the inauguration of the P8.8-billion expansion of its local affiliate’s factory.

“We’re also thinking about starting using the Philippine tobacco in the smoke-free products,” Jacek Olczak, CEO of PMI, said on the sidelines of the inauguration of the expansion of PMFTC Inc.’s factory in Tanauan City, Batangas.

Olczak said the quality of the country’s tobacco leaves are continuously “getting better and better.”

“They require even better quality, consistency, etc. But I believe the farmers, the tobacco growers in the Philippines can deliver on that quality,” Olczak added.

PMFTC is a 50-50 partnership between PMI and Lucio Tan’s Fortune Tobacco Corp.

PMFTC’s factory expansion will be producing its heated tobacco sticks under the Blends brand for its smoke-free product called Bonds.

With the facility, PMFTC will now produce locally all the Blends sticks that it will sell in the domestic market.

Furthermore, the factory would also produce Blends sticks for exports to nearby Asian countries.

Bonds by IQOS is PMI’s “affordable, compact and low-maintenance” smoke-free product for adults who want to continue to smoke tobacco.

According to Olczak, PMFTC’s tobacco requirement is more than $120 million worth.

PMFTC currently purchases local tobacco leaves and imports other varieties of tobacco tar, which are mixed to achieve the different blends of its cigarette items.

“Well, essentially, you will find the Philippine tobacco in our products in every country in which we operate,” he said.

“So in more than 100 markets, you will find the Philippine tobaccos in the product,” he added.

The plant, which is expected to be operational within the year, ensures that Filipino tobacco growers “have a future,” Olczak said.

“We’re very happy with the regulatory environment and the business environment in the Philippines, and we decided to locate this manufacturing here,” he said.

The P8.8-billion investment was first announced in 2022 by PMI and is expected to create as much as 220 new specialized jobs, making it the company’s largest investment to date in the cigarette-alternative category in line with its vision of a smoke-free Philippines.