Philip Morris bares more investment capital

Cigarette maker Philip Morris International (PMI) said the ban on mainstream advertising for cigarettes has allowed them to have more money for operations and possibly investment.

Philip Morris Philippines Manufacturing Inc. head of operations Vincent Nguyen said the ban on advertisements have given them more flexibility in terms of finances.

Nguyen said they have not seen any significant decrease in demand after the ban was in place. “It is the same for other countries, we rely on word of mouth because people have already experienced our product.”

Likewise, PMI managing head Chris Nelson said the slowdown in the world economy did not weaken the demand for cigarettes. “There was no significant effect,” Nelson said.

Nelson said PMI has consistently been the number two brand in the country with a market share of 28 percent. However, he said the aim is to be the number one manufacturer.

When asked if this means that the tobacco firm will continue on its plan to invest P1 billion in the country, Nelson said they would still have to study the matter.

Last January, Nelson said PMI will be investing P1 billion for the construction of two warehouse facilities in Subic.

The first phase of the warehouse was inaugurated January. The first phase was a P30 million facility which involved the renovation and refurbishing of the 10,000 square meter building at the Subic Bay Freeport Zone. Phase two, Nelson said will be done in 2009 and will have a capacity to hold 24,000 metric tons of tobacco. The phase two will be four times the size of the existing facility.

The new facility will store tobacco leaf bought from suppliers in other Asian countries such as Indonesia, Thailand and India.

With the warehouse expansion, Philip Morris will increase tobacco purchases not only from the country but also from other Asian countries. The leaf stored will be used for the production of cigarettes in their plants in the Philippines, Malaysia and Indonesia.