[Intl-tobacco] Philip Morris to Invest $300 Mln in Philippine Cigarette Plant (fwd)

[Robert Weissman]

Philip Morris to Invest $300 Mln in Philippine Cigarette Plant
by Dominic G. Diongson
PHILIPPINES;
Source: Bloomberg News, Wednesday, 5/24/00

Manila, May 24 (Bloomberg) -- Philip Morris Cos., the world's largest
tobacco company, said it will spend $300 million on a new factory to
triple production of Philip Morris and Marlboro brands in the Philippines
to 60 billion cigarettes.

Philip Morris Philippines will own 80 percent of the new plant, with
longtime local associate La Suerte Cigar & Cigarette Factory holding the
remainder. When the new plant, located about 50 kilometers south of
Manila, begins operation in 2003, the partners will close their existing
plant in a suburb of the capital.

La Suerte has produced Marlboro and Philip Morris brands under a license
for about 45 years. Once the new plant is in operation, Philip Morris will
take over production, according to Renato Salud, a spokesman for Philip
Morris Philippines. La Suerte wasn't immediately available for comment on
the new arrangement.

Salud said the 20 billion cigarettes a year sold under Philip Morris brand
names represents about 28 percent of the domestic cigarette market. The
Philippines is the biggest nation of smokers in Southeast Asia after
Indonesia.

The new factory's enlarged output offers export prospects, Salud said.

``Hopefully, we could use it as a base for exporting to other Asean
countries,'' he said.

The Association of Southeast Asian Nations (Asean), which groups the
Philippines with nine other countries in the region, is considering
lowering tariffs in the future, which could benefit cigarette exports.

In the region, Philip Morris has plants in Malaysia and Indonesia. It also
imports some of its brands, such as Benson & Hedges and Virginia Slims,
into the Philippines and other Asian countries