[Intl-tobacco] Philippines: Philip Morris to invest $300 M in RP (fwd)

[Robert Weissman]

(note the date)

Philip Morris to invest $300 M in RP

by Des Ferriols
Source: Philippine Star, Wednesday, 5/24/00

US-based tobacco giant Philip Morris Co., Inc. is putting in $300 million
worth of new investments for the development of a new and expanded
cigarette manufacturing facility in Southern Tagalog.

Top officials of PMCI's Philippine subsidiary, Philip Morris Philippines
Inc., met with Trade and Industry Secretary Manuel Roxas II yesterday to
explore the possibility of tapping government incentives available to
export industries.

Hit hard by a dramatic contraction in the increasingly health-conscious
markets of Europe and North America, the world's biggest cigarette
manufacturer has been moving into Asia and Africa where the markets
continue to expand by leaps and bounds.

Philip Morris already has tobacco processing and manufacturing facilities
in Remban, Malaysian and Malang, Indonesia.

During his meeting with PMPI managing director George Farrah, Roxas said
the company remains upbeat about the prospects in the Philippine market
and the Asian market in general.

According to Roxas, the company is planning to put up a new joint venture
with its long-time local partner, La Suerte Cigar and Cigarette Factory,
which would eventually seek the registration of its project with the Board
of Investments.

Philip Morris, Roxas said, intends to close down its existing facility
along South Super-Highway in Para=F1aque and move its operations to Souther=
n
Tagalog where it will construct a new and expanded manufacturing facility.

The new facility, according to Roxas will be one and a half times bigger
than the company's existing plant and will increase its production
capacity from 20 billion cigarette sticks to 30 billion sticks.

"They are planning to export part of their production so they are thinking
of registering as an export business," Roxas said. "This would quality
them for incentives available to all export industries."

According to Roxas, "They want to continue and expand their business here
because of our Western-style of doing business as well as our workforce,"
Roxas said. "Add to this the fact that the Philippines is the 15th largest
cigarette market in the world."

Roxas said Philip Morris plans to source part of its tobacco requirements
from local sources. Traditionally, the company imports 60 percent of its
requirement for Virginia tobacco while buying the rest from local
producers.

Philip Morris' existing joint venture with La Suerte employees 1,200
workers and generated P14.33 billion in sales in 1999 and P251.58 million
in profits. PMPI is 19th in the top 100 companies listed by the Securities
and Exchange Commission.