Philip Morris International U.S. Affiliate to Create 500 Jobs Investing $600 Million in Aurora, Colo., Manufacturing Facility

Rhea-AI Summary

Philip Morris International (PMI) has announced a $600 million investment to open a state-of-the-art manufacturing facility in Aurora, Colorado. The facility, set to begin operations by the end of 2025, will produce Swedish Match ZYN nicotine pouches to meet growing global demand for smoke-free products. This investment is expected to create 500 direct jobs and an additional 1,000 indirect jobs, with an ongoing annual economic impact of $550 million for Colorado.

The new facility joins existing smoke-free product manufacturing sites in Owensboro, Kentucky, and Wilson, North Carolina. PMI's U.S. affiliate plans to break ground later this year, with regular production starting in 2026. The construction phase alone is projected to create nearly 5,000 jobs with a $1 billion economic impact. This expansion aligns with PMI's mission to provide better alternatives to smoking for legal-age consumers who smoke.

Positive

• $600 million investment in new manufacturing facility
• Creation of 500 direct jobs and 1,000 indirect jobs
• $550 million annual economic impact for Colorado
• Expansion of smoke-free product manufacturing capacity
• Average annual salary of $90,000 for new jobs

Negative

• None.

Insights

Financial Analyst

Philip Morris International (PMI) has announced a significant investment of $600 million over the next two years to establish a new manufacturing facility in Aurora, Colorado. This move is part of PMI's strategy to expand its smoke-free product line in response to the growing global demand for alternatives to traditional cigarettes.

The financial implications of this investment are substantial. The creation of 500 direct jobs with an average annual salary of $90,000 and an additional 1,000 indirect jobs will contribute an ongoing annual economic impact of $550 million to the State of Colorado. From a short-term perspective, the construction phase alone is expected to generate nearly 5,000 jobs and contribute $1 billion in economic impact, providing a temporary boost to the local economy.

From a long-term perspective, the new facility will enable PMI to meet the increasing demand for its ZYN nicotine pouches. This could potentially stabilize and even boost the company's revenue streams as it focuses on smoke-free products. Investors should note that PMI's ongoing investment in smoke-free alternatives reflects a strategic pivot towards products that are perceived as lower-risk compared to traditional cigarettes, aligning with broader public health trends and regulatory pressures.

However, investors should also consider the inherent risks associated with this substantial investment. The success of the new facility will depend on various factors, including continued consumer demand for smoke-free products, regulatory changes and potential competition.

Market Research Analyst

The decision by PMI to invest in a new manufacturing facility in Aurora, Colorado, highlights a broader trend in the tobacco industry towards smoke-free alternatives. ZYN nicotine pouches, which will be manufactured at the new facility, cater to a growing segment of legal-age consumers seeking alternatives to traditional smoking. This shift is in line with PMI's mission to transition smokers to what they describe as 'better alternatives.'

The market demand for smoke-free nicotine products has been rising, driven by increased health awareness, regulatory pressures and the availability of scientifically substantiated alternatives. PMI's investment in smoke-free products aligns with these trends and positions the company well to capture a significant share of this evolving market.

It's also worth noting the competitive landscape. With PMI's acquisition of Swedish Match, the company has strengthened its position in the U.S. market for oral nicotine pouches. This strategic move could potentially give PMI an edge over competitors who are slower to adapt to the changing market dynamics.

However, the success of this initiative will depend on various factors, including consumer acceptance, regulatory approvals and competitive actions. It will be important for investors to monitor how these elements unfold over time to gauge the long-term viability of PMI's smoke-free strategy.

New facility to support company’s U.S. mission to deliver a smoke-free future by moving legal-age consumers who smoke to better alternatives

Aurora facility joins existing smoke-free product manufacturing sites in Owensboro, Ky., and Wilson, N.C.

AURORA, Colo.--(BUSINESS WIRE)-- Today, Philip Morris International Inc. (PMI) (NYSE: PM) announced an investment of $600 million over the next two years through one of its U.S. affiliates to open a state-of-the-art manufacturing facility in Aurora, Colo. The facility is expected to create 500 direct jobs with ongoing annual economic impact of $550 million and an additional 1,000 indirect jobs* for the State of Colorado as it produces Swedish Match ZYN nicotine pouches to help meet the growing global demand from legal-age consumers for smoke-free products.

Production of ZYN oral nicotine pouches at the Swedish Match Owensboro, Ky., facility. (Photo: Business Wire)

“PMI and its U.S. affiliates are accelerating their mission to move adults who smoke away from cigarettes in the U.S. by investing in new U.S. manufacturing capacity to meet the increasing demand for nicotine options that are scientifically substantiated as better alternatives,” said PMI Americas President and U.S. CEO Stacey Kennedy. “We believe Colorado is likeminded in its commitment to innovation, economic opportunity and public health, and we’re eager to work with the state and its talented workforce as we expand our U.S. manufacturing presence.”

PMI’s U.S. affiliate plans to break ground on the new facility later this year and to begin preliminary operations by the end of 2025 with regular production starting in 2026. The construction phase of the project alone is expected to create nearly 5,000 jobs related to the building of the facility with nearly $1 billion in economic impact.* Career opportunities at the new facility will cover a wide range of skill levels including positions such as engineers, production staff, technicians and quality control, with an anticipated average annual salary of around $90,000. Career opportunities will be shared at https://www.pmi.com/us/job-opportunities.

As previously announced, Swedish Match North America is also currently working to increase ZYN oral nicotine pouch production at its Owensboro, Ky., facility. Ongoing investments in both Owensboro and Aurora are designed to provide sufficient capacity in the near and mid-term for the current adoption growth rate of ZYN with U.S. adult nicotine consumers, as well as capacity for exports.

PMI first entered the U.S. market following its acquisition of Swedish Match in late 2022. Swedish Match’s ZYN oral nicotine pouches have been on the market in the U.S. for more than a decade and are designed as a better option for legal-age consumers who smoke and wish to continue using nicotine.

PMI is headquartered in Stamford, Conn., and its U.S. affiliates have more than 2,300 employees. PMI is on a mission to improve public health by providing the nearly 30 million legal-age U.S. consumers who smoke and other nicotine users with innovative products that are better alternatives to smoking. Since 2008, PMI has invested $12.5 billion globally to develop, scientifically substantiate, and commercialize innovative smoke-free products for legal-age nicotine consumers. PMI’s U.S. affiliates operate smoke-free product manufacturing facilities including the Swedish Match North America Owensboro, Ky., plant that makes ZYN nicotine pouches and a facility in Wilson, N.C., that produces HEETS, the consumable for the IQOS heated tobacco device. Swedish Match North America has a regional office in Richmond, Va.

U.S. marketing practices support 21+ access only

PMI’s U.S. affiliates are committed to responsible marketing practices focused on limiting access to adults 21 years of age and older. PMI’s U.S. affiliates do not use social media influencers in the U.S. or people under the age of 35 in marketing materials. They also employ independent age-verification systems like “Double Verify” to direct digital advertising to those over 21, and owned digital platforms are age-gated at the point of access and restricted to current nicotine users of legal age. Swedish Match North America is a member of “We Card,” a national nonprofit serving retailers of age-restricted products, and a founding board member and investor in TruAge®, a free retail technology that provides stores a more accurate way of age verification, including the ability to detect fake IDs and ensure 21+ access only.

Smoke-free mission in the U.S.

Because adult nicotine consumer preferences differ, PMI’s U.S. affiliates are working to offer a range of smoke-free options. This effort includes investing in expanded production for nicotine pouches and beginning targeted 21+ consumer activations of its innovative IQOS heat-not-burn device in select U.S. markets this year. IQOS is the first electronic nicotine device authorized by the U.S. Food and Drug Administration (FDA) as a modified risk tobacco product with reduced exposure claims. The FDA found that such authorization is appropriate for the protection of the public health. Although not risk-free, studies show that because IQOS heats tobacco instead of burning it, the device significantly reduces the production of and exposure to harmful and potentially harmful chemicals compared to combustible cigarettes for adults who smoke who switch to IQOS completely.

Commitment to corporate social responsibility

PMI’s U.S. affiliates have contributed approximately $25 million to charitable causes since 2022 and look to accelerate and amplify the good work of organizations already active within communities through both financial contributions and volunteering. Three key focus areas include supporting military veterans, empowering women and funding hyperlocal solutions. PMI’s U.S. affiliates also helped form “United to Safeguard America from Illegal Trade” (USA-IT), a coalition of nearly 100 national and state brand enforcement experts, law enforcement agencies, academics and leading business organizations working to combat illegal trade. USA-IT has trained more than 36,000 law enforcement officials.

Philanthropic partnerships in Colo.

PMI’s U.S.-based affiliates have announced their commitment to veterans in Colorado with an investment of $350,000 over two years to the Rocky Mountain Veterans Advocacy Project, a Colorado-based law clinic to help veterans in need access the benefits and care they’ve earned through their service. They also plan to support the Veterans Community Project that provides veterans’ housing with $100,000 directed to Colorado case management and are making donations to Colorado Gold Star Mothers, the Colorado Freedom Memorial, Hire Heroes USA directed to Colorado homeless veterans hiring, Soldier’s Angels for food provisions and Musicians on Call for Veterans Administration hospital visits. They also have committed $250,000 a year for the next eight years to the flexible housing fund that benefits residents of Adams County and the City of Aurora by supporting transitional housing for those in need.

*Estimates provided from economic impact analysis study conducted by EConsult Solutions, a Philadelphia-based economics consulting firm.

Additional multimedia assets

To learn more about the Colorado facility, view the supporting video news release http://u.pc.cd/E6F.

Philip Morris International in the U.S.: Delivering a Smoke-Free Future

Philip Morris International and its U.S. affiliates are working to deliver a smoke-free future. Since 2008, PMI has invested $12.5 billion globally to develop, scientifically substantiate and commercialize innovative smoke-free products for adults who would otherwise continue to smoke with the goal of transitioning legal-age consumers who smoke to better alternatives. In 2022, PMI acquired Swedish Match – a leader in oral nicotine delivery – creating a global smoke-free champion led by the IQOS and ZYN brands. The U.S. Food and Drug Administration has authorized versions of PMI’s IQOS electronically heated tobacco devices and Swedish Match’s General snus as Modified Risk Tobacco Products and renewal applications for these products are presently pending before the FDA. For more information, please visit www.pmi.com/us/ and www.pmiscience.com.

Forward-Looking and Cautionary Statements

This press release contains projections of future results and goals and other forward-looking statements, including statements regarding expected operational performance; capital expenditures; and business plans and strategies. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. In the event that risks or uncertainties materialize, or underlying assumptions prove inaccurate, actual results could vary materially from those contained in such forward-looking statements. Pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, PMI is identifying important factors that, individually or in the aggregate, could cause actual results and outcomes to differ materially from those contained in any forward-looking statements made by PMI.

PMI's business risks include: excise tax increases and discriminatory tax structures; increasing marketing and regulatory restrictions that could reduce our competitiveness, eliminate our ability to communicate with adult consumers, or ban certain of our products in certain markets or countries; health concerns relating to the use of tobacco and other nicotine-containing products and exposure to environmental tobacco smoke; litigation related to tobacco and/or nicotine use and intellectual property; intense competition; the effects of global and individual country economic, regulatory and political developments, natural disasters and conflicts; the impact and consequences of Russia's invasion of Ukraine; changes in adult smoker behavior; the impact of natural disasters and pandemics on PMI's business; lost revenues as a result of counterfeiting, contraband and cross-border purchases; governmental investigations; unfavorable currency exchange rates and currency devaluations, and limitations on the ability to repatriate funds; adverse changes in applicable corporate tax laws; adverse changes in the cost, availability, and quality of tobacco and other agricultural products and raw materials, as well as components and materials for our electronic devices; and the integrity of its information systems and effectiveness of its data privacy policies. PMI's future profitability may also be adversely affected should it be unsuccessful in its attempts to introduce, commercialize, and grow smoke-free products or if regulation or taxation do not differentiate between such products and cigarettes; if it is unable to successfully introduce new products, promote brand equity, enter new markets or improve its margins through increased prices and productivity gains; if it is unable to expand its brand portfolio internally or through acquisitions and the development of strategic business relationships; if it is unable to attract and retain the best global talent, including women or diverse candidates; or if it is unable to successfully integrate and realize the expected benefits from recent transactions and acquisitions. Future results are also subject to the lower predictability of our smoke-free products performance.

PMI is further subject to other risks detailed from time to time in its publicly filed documents, including PMI's Annual Report on Form 10-K for the fourth quarter and year ended December 31, 2023, and the Quarterly Report on Form 10-Q for the first quarter ended March 31, 2024. PMI cautions that the foregoing list of important factors is not a complete discussion of all potential risks and uncertainties. PMI does not undertake to update any forward-looking statement that it may make from time to time, except in the normal course of its public disclosure obligations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240716269122/en/

Philip Morris International

PMI U.S. Communications

Matt Sheaff

+1 (203) 524-9146

matthew.sheaff@pmi.com

Source: Philip Morris International

FAQ

What is Philip Morris International (PM) investing in Aurora, Colorado?

Philip Morris International is investing $600 million to open a state-of-the-art manufacturing facility in Aurora, Colorado, for producing Swedish Match ZYN nicotine pouches.

How many jobs will PMI's new facility in Aurora, Colorado create?

The new facility is expected to create 500 direct jobs and an additional 1,000 indirect jobs for the State of Colorado.

When will PMI's new manufacturing facility in Aurora, Colorado begin operations?

PMI plans to begin preliminary operations by the end of 2025, with regular production starting in 2026.

What is the expected economic impact of PMI's new facility in Aurora, Colorado?

The facility is expected to have an ongoing annual economic impact of $550 million for the State of Colorado.

What products will be manufactured at PMI's new facility in Aurora, Colorado?

The facility will produce Swedish Match ZYN nicotine pouches to meet the growing global demand for smoke-free products.