Philip Morris unveils P8.8-B IQOS factory

First Lady Lisa Araneta-Marcos added a special touch during the inauguration of the P8.8-billion manufacturing facility of Philip Morris International (PMI), which is targeted to boost the production of smoke-free products, such as the IQOS and Bonds brands.

The multinational is shifting to the production of smoke-free alternatives to cigarettes amid the global health consciousness wave.

The First Lady, in unveiling the P8.8-billion ($150 million) PMI manufacturing plant in Tanauan City, Batangas, was joined by Department of Agriculture Secretary Francisco Tiu Laurel Jr., Philip Morris International chief executive officer Jacek Olczak, and PMFTC Inc. president Denis Gorkun.

Olczak said the new smoke-free product manufacturing facility marks one of the very first completed foreign investments under the Marcos administration.

Olczak told reporters, on the sidelines of the unveiling of the new 12,360 square meters (sqm)plant inside First Philippine Industrial Park in Tanauan City, that PMFTC is procuring more than $120 million worth of Philippine tobacco, portions of which will be used for its products in over 100 markets worldwide.

“The quality of tobacco in the Philippines is getting better and better. We’re also thinking of starting to use Philippine tobacco in smoke-free products. They require even better quality and consistency. I believe the tobacco growers in the Philippines can deliver on the quality,” he said.

Earlier, President Ferdinand “Bongbong” Marcos Jr. recognized the tobacco industry as “a vibrant catalyst for economic growth in the country, especially in parts of Northern Luzon and Mindanao.”

Marcos also noted that the tobacco industry is an “indispensable bedrock that generates income, livelihood, opportunities and employment, particularly in areas where its cultivation spans generations and holds pivotal significance in the way of life of its communities. It is a significant source of tax revenues that are used to fund government programs.”

He cited the need for the livelihood of thousands of Filipino tobacco farmers to be protected.

Biggest investment

The new manufacturing wing in the PMFTC factory in Tanauan City, Batangas, represents, to date, the largest investment in the cigarette-alternative category in the country, in line with PMI’s vision to deliver a smoke-free future.

“The opening of this state-of-the-art facility, an investment of 8.8 billion Philippine pesos or 150 million U.S. dollars, marks another significant milestone in our commitment to the smoke-free Philippines,” Olczak said.

He said that the expansion of Philip Morris’ presence in the country is also “a testament to our confidence in the Philippine economy and the local tobacco farming industry,” he said.

PMFTC Inc., the Philippine affiliate of PMI, is the leading cigarette manufacturer in the Philippines.

Gorkun said the facility is “another living proof that our vision of a smoke-free Philippines has gone beyond the abstract. This factory will produce heated tobacco sticks for our smoke-free products — that is both a milestone in our journey and a pledge to prioritize the wellbeing of our local communities.”

Blends from Batangas

The newly unveiled Tanauan manufacturing site of the PMI will house manufacturing lines to produce specially-designed heated tobacco sticks under the brand Blends. These heated tobacco sticks are for exclusive use in Bonds by IQOS.

In 2015, PMI commercialized IQOS, a product that heats tobacco rather than burning it.

The US Food and Drug Administration in 2020 authorized IQOS for commercialization with claims of modified exposure.

In November 2022, PMFTC Inc. launched Bonds by IQOS and the accompanying specially designed heated tobacco sticks BLENDS, offering adults who would otherwise continue to smoke access to an affordable, compact, and low-maintenance smoke-free product — validated by science as a better alternative to cigarettes.

Bonds by IQOS heats tobacco instead of burning it and delivers authentic tobacco taste satisfaction without ash and less smell than cigarettes.

It features resistive external heating via the patented Roundheat tobacco system. When Bonds by IQOS heats the tobacco, it emits on average 95 percent lower levels of harmful chemicals compared to cigarettes.

IQOS, the world’s most successful tobacco heating device, was launched by PMFTC in 2020 in the Philippines together with its accompanying tobacco sticks called Heets. IQOS Iluma, the latest version of PMI’s heated tobacco device, and its consumable heat sticks, called Terea, were introduced in the country last year.

In late 2023, PMFTC added ZYN nicotine pouches to its portfolio of smoke-free products. ZYN is available locally online and in IQOS stores, vape stores, and select 7-11 outlets and tobacco shops.

All PMI smoke-free nicotine-containing products are intended for adults who would otherwise continue smoking or using other nicotine products and are looking for a better alternative to cigarettes.

“When we embrace smoke-free alternatives, we take a proactive step towards expanding the potential of the local tobacco crop, ensuring a sustainable future for generations of local farmers and individuals who rely on the tobacco industry,” Gorkun said.