PMI eyes Philippines as export hub for smoke-free products

DUBAI – Citing the Philippines’ “very progressive” regulation and investment-friendly environment, Philip Morris International (PMI) is eyeing to make the country an “export hub” for its science-based smoke-free products, company officials said.

PMI CEO Jacek Olczak also noted that the company has not built a single cigarette factory over the last 10 years and has converted some of its plants, including one in the Philippines, into smoke-free facilities.

Christos Kiritsis, vice president of Smoke Free Products for South and Southeast Asia, Commonwealth of Independent States and Middle East and Africa Region of PMI, said the Philippines is one of the countries where smoke-free products are properly regulated.

He said the Philippines’ “very progressive regulatory framework” makes it an ideal country to have investments in smoke-free products “not only for the local market, but also for exportation.”

“We want to make it eventually an export hub, especially for products like the SFP (smoke-free product),” Kiritsis told visiting Filipino journalists on the sidelines of the “Technovation 2025” event at the W Hotel The Palm here.

“Its (Philippines) regulatory (system) has the right framework, it’s an investment-friendly country and has also the size and the population of the local market that is also important for us,” he said.

In the Philippines, PMI offers smoke-free alternatives such as the heated tobacco product, IQOS and ZYN nicotine pouch, which provide nicotine without burning tobacco.

Olczak said PMI has invested $14 billion globally for more than a decade now developing smoke-free products as alternatives to cigarettes for legal-age adults.

Currently, 41 percent of its global net revenues come from its smoke-free business, company officials said.

“We’re working on another version of IQOS, another version of improved pouches and other versions of e-vapor. But look, the way to look into this, if we have invested over $14 billion, it demonstrates how serious we are,” Olczak said.

“We’re adding to this (investment), which means we’re even more serious than we were before,” he said.

The 1.2-hectare plant of the PMI and its Philippine affiliate PMFTC Inc. in Tanauan City, Batangas, which was inaugurated last year, has been producing specially designed tobacco sticks for PMI’s smoke-free products.

“The only factories we did were either fully smoke-free or we’re converting the (factories) because we also take care of the employment. OK, cigarettes (production and use) will be going down, (but) the same people will be retrained and produce more (smoke-free products),” Olczak said.

With still 16 million smokers, Kiritsis said PMI is also looking at expanding the commercialization of its more affordable smoke-free products in the Philippines.

“It’s (Philippines) a big market, still (with) a big amount of smokers. We need to make sure that they have all the options so they can make the best choice for them,” he said.

According to Kiritsis, Bonds, PMI’s second heat-not-burn device, was piloted in the Philippines years ago.

“I guess it’s something that we will see back (in the) Philippines at some point,” he said, adding the device has been developed especially for Asian markets.

“So, it’s going closer to the lower price of cigarettes, just to make sure that it becomes accessible to the majority of the consumers,” Kiritsis said.

“But the essence is developing a scientifically substantiated device that will reduce by 95 percent all the harmful substances,” he added.

Of the one billion smokers worldwide, roughly 41 million adults are users of PMI smoke-free products as of the first half, the company said.