Philip Morris ceases investment in Russia, considering production reductions
MOSCOW. March 9 (Interfax) - Philip Morris International Inc. (PMI) is suspending planned investments in Russia, including new product launches, investments in innovation, as well as commercial and manufacturing activities, the tobacco concern said in a statement.
PMI has also stepped up plans to reduce manufacturing operations in Russia amid supply chain disruptions and changing regulations, the company said.
"Given the situation, the board of directors and management have decided to halt all of our planned investments in Russia and to step up plans to reduce our production operations. We will support our employees in Russia during this period, including by continuing to pay their wages," PMI CEO Jacek Olczak said in the statement.
PMI's Russian business in 2021 accounted for nearly 10% of cigarette and heated tobacco sales, and around 6% of PMI's global revenue.
The company started operating in Russia in 1992, opening a representative office in the country. PMI has more than 3,200 employees in Russia.
PMI owns a tobacco factory in the country's Leningrad Region, CJSC Philip Morris Izhora; and it owns Philip Morris Sales and Marketing that distributes cigarettes through a branch network in more than 100 Russian cities. Last autumn, PMI decided to close a factory in the Krasnodar Territory amid a shrinking tobacco market.
The brand portfolio includes Marlboro, L&M, Bond Street, Parliament, and others. The company also produces tobacco sticks for its Iqos tobacco heating systems.
PMI's share in the Russian tobacco market is 31.7% according to data for the fourth quarter 2022.