MANILA, Philippines – The merger of US-based tobacco giant Philip Morris and Lucio Tan owned Fortune Tobacco Corp. four months ago has allowed the new entity to capture 90 percent of the market and that business has been going well, the head of the new entity said yesterday.
The new company, formed last February is aptly called PMFTC, which combines the initials of Philip Morris Philippines Manufacturing Inc. (PMPI) and Fortune Tobacco Corp. (FTC).
PMTFC president Chris Nelson said that while he cannot disclose sales figures and volume turnover during the first four months of the merger, he said that there has been improvement in the business with the two entities both having strong brands.
Philip Morris owns the Marlboro and Philip Morris brands while Fortune carries Hope, Fortune, Champion and Boss cigarettes.
“We’ve been bringing in the best practices from both sides,” Nelson told reporters yesterday.
Nelson said that while the new entity is still four months old, there are already a lot of things that the local cigarette industry can look forward to. “There will be continuing commitment to tobacco growth,” he said.
Asked if the new entity would introduce a totally new brand in the market aside from the existing brands held by Philip Morris and Fortune Tobacco, Nelson was non-committal.
“Before you consider having an offspring, you have to look into planning first,” Nelson said, referring to the “marriage” between the two entities.
However, Nelson assured that along the way, there will be new innovations and an improvement in products and services offered to consumers as the merged entity combines the best practices of the two cigarette manufacturers.
According to the company, PMPI employs around 1,000 workers while Fortune Tobacco has around 4,000 employees.
Asked if the venture has resulted in job losses, Nelson said there were no concrete moves yet along that direction.
The merger came as a surprise to industry players given the strong rivalry between the two cigarette firms. Philip Morris International said it had a 15.4 percent share of the total international cigarette market outside of the United States in 2009.
The monetary value was not clear and both companies said the two entities each has equal economic interest in the new company.
Philip Morris maintains a regional manufacturing facility in a 25-hectare complex in Tanauan City, Batangas while Fortune has a facility in Marikina.