Philip Morris invests P1 billion on tobacco leaf regional warehouse

MANILA, Philippines - Philip Morris Philippines Manufacturing Inc. (PMPI) is investing P1 billion in Subic for the construction of its tobacco leaf regional warehouse.

At the same time, PMPI signed a 50-year lease agreement with the Subic Bay Metropolitan Authority (SBMA) to increase the total land area of its project from the current 9,600 square meters to 49,279 square meters.

PMPMI managing director Christopher Nelson said that the new warehouse will boast of features like humidity control, fire suppression equipment, and air conditioning to handle the imported tobacco leaves from foreign suppliers, which will then be shipped and processed in cigarette manufacturing facilities in the Philippines, Malaysia and Indonesia.

Once completed, the state-of-the-art warehouse will have a capacity to hold some 24,000 metric tons of tobacco. At present, the existing P30-million refurbished warehouse can only accommodate 6,100 metric tons of tobacco.

Nelson said that PMPMI continued to expand since their establishment in Subic in 2007 at the Subic Technopark, and even posted growth during the global economic slowdown which hit the country in the last quarter of 2008.

Nelson added that the warehouse expansion is “a reflection of our faith in the Philippine government, particularly the SBMA.”

The PMPMI managing director also expressed confidence that the company will sustain profitability and competence against its competitors, despite the increasing competition in the tobacco industry.

“If you plan well ahead, and stay committed, this country will reward you in many ways,” Nelson said.

He added that the 50-year lease extension is another expression of PMPMI’s gratefulness to the Filipino people.

“It may be difficult to get us, but once you have us, it would be difficult for us to leave you,” said Nelson.

For his part, SBMA Administrator Armand Arreza said the agreement, which extended PMPMI’s lease agreement to 50 years, “strengthens Subic Bay Freeport’s competitive posture as South East Asia ’s logistics hub, as envisioned by President Arroyo.”

He added that this free port’s multi-modal transport capabilities, world-class infrastructures, modern road networks, and tax incentives might have prompted PMPMI to sign an agreement that spans half a century.

“A global brand such as Phillip Morris would not make hasty decisions, which means the firm has really found Subic an enviable logistics hub,” said Arreza.