On Wednesday, tobacco manufacturer Philip Morris International officially opened a new factory in Lviv region, in which it has invested $30 million.
“The first line is already in operation. The second line is almost completed and will start operating in June… In total, five lines will be installed, 10 billion cigarettes will be produced, which will fully meet the needs of the local market of Ukraine,” said Philip Morris Ukraine (PMU) CEO Maxim Barabash at the opening of the factory.
He emphasized that the focus of the production is to cover the market demand for cigarettes.
According to Barabash, there are no plans to expand production for export or manufacture other products.
According to PMU, 250 jobs will be created at the factory. By now, the company already employs about 100 people relocated from the Kharkiv factory, which was “mothballed” on February 24, 2024, the day of the Russian invasion, and another 150 people are planned to be relocated by the end of the year.
“My dream for the future after the victory is that we have two factories. One would produce cigarettes, and the other would be in Kharkiv, working on new products that would be relevant and relevant at the time when this comes true,” Barabash summarized.
According to him, this year Philip Morris celebrates 30 years of operation in Ukraine. During this time, the company has invested about $750 million in the Ukrainian economy and is one of the largest taxpayers.
Philip Morris was spun off from Altria in 2008 and is one of the world’s largest tobacco manufacturers. The company’s revenue for 2023 increased by 10.7% compared to 2022 to $35.2 billion, and for the first quarter of 2024 – by 9.7% to $8.79 billion. The report states that Ukraine accounts for approximately 2% of total sales in physical terms and 1% in monetary terms.
In 2022, PMI reduced shipments to the Ukrainian market by 30.1% to 11.07 billion cigarettes and tobacco sticks due to the war, but in 2023 it managed to increase shipments of finished products by 8.4%, including 14.9% in the fourth quarter. Last October, the company announced that it had recovered its share of the Ukrainian market to 24% after it fell to 14% from 28.5% in the first months after Russia’s invasion.
Prior to the launch of the new factory, PMU was forced to import products from eight PMI factories outside the country and a temporary partnership with another international manufacturer in Ukraine.
In addition to cigarettes, PMI develops and manufactures smokeless products, such as systems for electrically heating tobacco, POD systems containing nicotine, and nicotine products for oral administration. Sales of smokeless products accounted for 39% of PMI’s total net revenue in the first quarter of 2024.
