Tag: Philip Morris Fortune Tobacco Co.

  • New President at PMFCT

    New President at PMFCT

    Photo: motortion

    Gijs Lambert Johan de Best will take over as president of Philip Morris Fortune Tobacco Co. (PMFTC) in the Philippines, succeeding Denis Gorkun who has been the company’s president since September 2019, reports The Philippine Star.

    Gorkun will step down at the end of this month, concluding a nearly 30-year career at PMI.

    De Best is currently Philip Morris International’s vice president strategy and program delivery for South and Southeast Asia, the Commonwealth of Independent States and Middle East and Africa.

    After starting as a financial analyst at PMI’s Netherlands office in August 2004, he held managerial positions in Belgium, Spain, Switzerland, Germany, eventually becoming director of business development during his time in Hong Kong.

    PMFTC is a partnership between PMI and LT Group’s Fortune Tobacco Corp., which owns 49.6 percent of PMFTC. In 2023, the firm held 55.2 percent share of the Philippines’ tobacco market.

    PMFTC’s net income declined 26 percent last year to PHP11.38 billion ($198.05 million). LT Group attributed the drop to an industry-wide price increase in the first quarter of last year, which depressed sales.

    Rising illicit cigarette trade incidence and trade inventory movements also contributed to the lower income, according to LT Group.

  • PMI Eyes Philippines Leaf for Smoke-Free

    PMI Eyes Philippines Leaf for Smoke-Free

    Photo: Philip Morris Fortune Tobacco Co.

    Philip Morris International may start using Philippine tobacco in its smoke-free products following the expansion of a factory operated by a local affiliate, reports The Philippine Star.

    “We’re also thinking about starting using the Philippine tobacco in the smoke-free products,” said PMI CEO Jacek Olczak during the inauguration of Philip Morris Fortune Tobacco Co.’s (PMFTC) factory in Tanauan City, Batangas.

    Olczak stated that the quality of the Philippines’ tobacco leaves is “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. The expanded factory will produce PMI’s heated-tobacco sticks under the Blends brand for its smoke-free Bonds product.

    PMFTC mixes local tobaccos with international varieties in its products.

    “You will find the Philippine tobacco in our products in every country in which we operate,” Olczak said. “So in more than 100 markets, you will find the Philippine tobaccos in the product.”

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

  • Philippine Law Paves Way for Alternatives

    Philippine Law Paves Way for Alternatives

    Photo: Balint Radu

    The enactment of a new vape law in the Philippines last year has paved the way for products that provide smokers with better alternatives to cigarettes, according to Philip Morris Fortune Tobacco Co. (PMFTC) President Denis Gorkun.

    In addition to moving regulation of vapes from the Philippine Food and Drug Administration to the Department of Trade and Industry, Republic Act 11900 lowered the purchase age for e-cigarettes and heated tobacco products from 21 to 18, removed a two-flavor limit on product flavors and allows companies to conduct corporate social responsibility-related activities.

    In an interview with the Manila Bulletin, Gorkin said PMFCT would soon launch IQOS Luma, which uses induction technology to heat tobacco, and ZYN nicotine pouches in the Philippines. Made by Swedish Match, which was acquired by PMFTC’s parent company, Philip Morris International in 2022, ZYN is the best-selling nicotine pouch in the United States today.

    Since PMFTC launched IQOS in the Philippines, around 75,000 local smokers had switched away from cigarettes, according to Gorkun.

    Gorkun said PMI aims to eliminate cigarette consumption in line with its vision to deliver a smoke-free future. “We will continue to work towards our smoke-free future vision with products that are found by numerous international health authorities to be far better compared to continuing to smoke cigarettes.”

    He said the passage of the landmark Vape Law a year ago is a “win” for public health. While providing smokers with less harmful options, the law also contains provisions to deter underage consumption, according to its proponents.

    One of the authors of the vape law, former Representative Sharon Garin, said Republic Act 11900 provides that vaping isn’t made appealing to minors. “We don’t want non-smokers to pick up the habit of vaporized or electronic cigarettes,” she was quoted as saying. “What we want is a less harmful alternative for current smokers.”

  • Philippines: Partnership Against Illicit Trade

    Philippines: Partnership Against Illicit Trade

    Photo: sebra

    The Philippines Bureau of Customs (BOC) has partnered with tobacco companies to help combat illicit trade in the country, reports the Philippine News Agency

    “These groups [smugglers and illicit traders] have been very creative and aggressive in entering our markets,” said Bienvenido Rubio, BOC commissioner. “Accordingly, close cooperation with tobacco companies is aimed at addressing their various modus (operandi) with even more comprehensive methods.”

    The BOC met with Philip Morris International and Philip Morris Fortune Tobacco Corp. executives. Rubio said they will work together to ensure public health safety and fair tobacco trade.

    “That has always been our goal and our mandate—to put these smugglers away and make them accountable, answerable and ultimately face the consequences of their nefarious activities,” he said.

    “It is important for us to recognize that these (schemes) are not only very real threats but well-orchestrated plans aimed at circumventing our laws,” said Verne Enciso, customs intelligence and investigation service director.

  • PMFTC Streamlines Philippine Operations

    PMFTC Streamlines Philippine Operations

    Photo: PMFTC

    Philip Morris Fortune Tobacco Corp. (PMFTC) will eliminate about 300 jobs at a factory in the Philippines as part of a streamlining initiative, reports The Inquirer.

    “In light of a steep decline in production volumes resulting in significant idle capacity at the Marikina plant, PMFTC Inc. confirms making the difficult decision to streamline its manufacturing operations that has been impacted by the market conditions over the past years,” PMFTC said in an official statement.

    According to a September 2020 statement from the Department of Labor and Employment, the Marikina plant has about 1,200 workers.

    While refraining to comment on the number of workers impacted, a PMFTC representative said those laid off would be getting a generous separation package.

    Last January, the major shareholders of the company announced a merger. Lucio Tan’s LT Group, which indirectly owns PMFTC through Fortune Tobacco Corp., will merge with Philip Morris Manufacturing Philippines. PMFTC would be the surviving corporation effective in June.

     

  • PMFTC Vows Support for Filipino Farmers

    PMFTC Vows Support for Filipino Farmers

    Photo: PMFTC

    Philip Morris Fortune Tobacco Corp. (PMFTC) plans to spend more than $100 million on leaf from Filipino farmers over the next few years, reports Business World Online, citing company officials.

    “While dependent on tobacco industry dynamics and the government’s excise tax policies, we anticipate spending approximately $130 million for more than 45,000 tons of Philippines green tobacco leaf over the next three years,” said PMFTC President Denis Gorkun in a letter addressed to the secretaries of Finance and Agriculture departments.

    According to Gorkun, Philippine leaf production has been falling in the wake of recent tax hikes on tobacco products and the expected surge in the illicit trade of cigarettes because of an increase in prices.

    A new round of excise tax increases on tobacco and vapor products took effect this year after Republic Act No. 11467 was signed into law in January.

    PMFTC sourced 43 percent of its leaf purchases from local farmers in 2019, both directly and through suppliers.

    PMFTC is also contemplating a $1 million investment to boost the National Tobacco Administration’s capacity to test aerosols and check product compliance.

    The company will continue its program that helps 15,000 tobacco farmers in tobacco-producing provinces become more competitive, said Gorkun.

    “We would also like to take this opportunity to assure PMFTC’s support for reasonable regulations applicable to tobacco products. The development of balanced and fair regulations will not only protect the interest of various stakeholders but also ensure the sustainability of the tobacco industry and the livelihood of our Filipino tobacco farmers, especially with the economic challenges we are facing today,” he said in his letter.

    Finance Secretary Carlos G. Dominguez III and Agriculture Secretary William D. Dar earlier asked tobacco manufacturers to buy more from local farmers and help the industry recover from the impacts of the coronavirus disease 2019 (COVID-19) pandemic.

    The lockdowns and other restrictions imposed to curb the spread of the disease has affected the flow of agricultural goods including tobacco.

    Japan Tobacco International on Monday said it would increase its purchases of Philippine tobacco to 4.6 million kg next year.

    Philippine law requires tobacco companies in the country to buy at least 15 percent of their leaf requirements from local farmers. 

  • Philip Morris Opens IQOS Stores in Manila

    Philip Morris Opens IQOS Stores in Manila

    Photo: Alpar Benedek | Dreamstime.com

    Philip Morris Fortune Tobacco Co. (PMFTC) is opening its first four IQOS stores in Manila, reports The Manilla Standard.

    While the heat-not-burn product has been available in the Philippines through several retail outlets since April, the opening of the stores marks a significant step towards achieving the company’s vision of a smoke-free future, according to PMFTC President Denis Gorkun.

    “PMFTC’s vision is to help adult smokers who would otherwise continue to smoke to move away from cigarettes as quickly as possible and switch to a better alternative,” Gorkun said.

    PMFTC parent company Philip Morris International has invested more than $7 billion in research, development and production capabilities to create smoke-free products such as IQOS, which are now available in several countries.

    In July, the U.S. Food and Drugs Administration (FDA) authorized the marketing of IQOS and heat sticks in the U.S. with a reduced exposure claim adding that such issuance is appropriate for the promotion of public health.

    Gorkun said the FDA decision shows that IQOS is a fundamentally different tobacco product compared to cigarettes and a better choice for adults who would otherwise continue smoking.

    About 60 percent of Filipino adult smokers are willing to try smoke-free alternatives provided they are made commercially available and meet quality production standards, according to a study commissioned by PMFTC.

    PMFTC said IQOS is aimed at adult smokers. The company is implementing age verification and access restriction to ensure that only legal age consumers 21 years old and above will have access to the stores, the e-commerce website and the IQOS products.