Since 2017, when the Otopeni plant transformation process began, Philip Morris International (PMI) has invested $ 500 million in developing production capacity, training employees and implementing sustainability solutions.
Of this amount, almost $ 100 million was invested in 2021. In the period 2022-2023 alone, PMI will invest over $ 100 million and continue to develop IQOS consumables production capacity for the domestic and foreign markets. , as well as to have as little impact on the environment as possible – the ultimate goal is for the plant to become carbon neutral by 2024.
The Philip Morris Romania factory in Philip Morris International is at the heart of the American company’s strategy to replace classic cigarettes with low-risk products. As a result of the investments made so far, the factory in Otopeni has been transformed from a cigarette factory into one that produces consumables for IQOS. Over 300 new jobs have been created since 2017, and today the factory has almost 950 employees.
“We are fully committed to replacing cigarettes with better alternatives to smoking, and the investments in the coming years clearly demonstrate this. The $ 500 million invested so far and the emphasis on developing the smokeless products category have made the total value of these consumables exports comparable to Romania’s cigarette exports. We are glad that through the investments so far we have managed to put Romania on the map of innovation and to offer hundreds of millions of smokers around the world a better alternative to continue smoking, ”said Daniel Cuevas, Managing Director, Philip Morris Romania.
92% of the factory’s production is exported to 54 markets on five continents, and 8% covers domestic consumption, where PMR has a market share of about 80% in the category of heated tobacco products in the third quarter of of the year 2021.
In 2020, exports of goods belonging to the product group “Other tobacco and tobacco substitutes” * amounted to EUR 669 million. They are mainly made of heated tobacco products and have increased almost 20 times since the beginning of the investment in the transformation of the Otopeni factory.
This category of products is in the top 5 agri-food products exported from Romania, exceeding in 2020 the value of exports of sunflower seeds. (Romania is the largest producer of sunflower seeds in the EU.)
“In order to continue investing, we need legislative predictability as well as a balanced fiscal framework that encourages innovation. Tobacco and nicotine products should be taxed according to the risks they expose consumers to. Fuel cigarettes, being the most widely used product and also the most harmful form of nicotine consumption, should be taxed at the highest and most significant level over innovative products, which do not involve burning tobacco. The increase in taxes on heated tobacco products would discourage Romanian cigarette smokers from switching to alternatives that science has proven to be better. This would be to the detriment of public health, ”added Dragoș Bucurenci, Director of External Affairs, Philip Morris Romania.
In the period 2022-2023, investments in the Otopeni plant will continue in order to further develop production capacity and expand the product portfolio, which will include consumables for IQOS ILUMA, the latest generation device recently launched by PMI.
The investments also target strategic sustainability goals: the plant aims to achieve a carbon-neutral footprint by 2024.