PMI Scaling Down Russian Operations

Philip Morris International today announced the concrete steps it has taken to suspend planned investments and scale down its manufacturing operations in Russia, following that country’s military invasion of Ukraine.

PMI said it has discontinued a number of its cigarette products offered in the market and is reducing its manufacturing activities accordingly. It has also suspended marketing activities in the country and canceled all product launches planned for 2022 in Russia, including the launch of its flagship heated tobacco product IQOS Iluma, originally planned for March 2022. In addition, PMI has canceled its plans to manufacture more than 20 billion Terea sticks (for IQOS Iluma) in Russia and the related ongoing investment of $150 million.

PMI’s board of directors and senior executives are working on options to exit the Russian market in an orderly manner, in the context of an increasingly complex and rapidly changing regulatory and operating environment.

“Our focus and all our efforts over the last four weeks have been to ensure the safety and security of our Ukrainian colleagues. We stand in solidarity with the innocent men, women and children who are suffering,” said PMI CEO Jacek Olczak in a statement. “We employ more than 3,200 people in Russia. We continue to support them, including paying their salaries, and we will continue to fulfil our legal obligations. We will continue to make decisions with their safety and security as a priority.”

Russia accounted for almost 10 percent PMI’s total shipment volumes and around 6 percent of PMI’s net revenues in 2021.