Towards the 'end of smoking'

Can you imagine a "smoke-free" world? Philip Morris International (PMI), one of the most prominent producers of branded cigarettes worldwide, said it does.

Contrary to its decades-long operations since 1881 and ownership of popular traditional cigarette brands, PMI Chief Executive Officer (CEO) Jacek Olczak said, "every endeavor we have taken has been focused on one goal: to accelerate the end of smoking."

"We have transformed to meet one purpose—to replace cigarettes with much better alternatives that are intended for adult smokers who would otherwise continue to smoke," he remarked in his speech during the inauguration of PMFTC Inc.'s P8.8 billion smoke-free e-cigarette manufacturing facility in Batangas last April 15.

PMI has been aggressive in its efforts to push its product lines catered to offering more sustainable ways to "take the smoke out of smoking," investing over $12.5 billion in their smoke-free products worldwide since 2008.

As of 2023, its alternative options occupy 36.4 percent of the company's net revenue share, with 33 million users for these products.  

Serving as PMI's Philippine subsidiary, PMFTC, formed through the combined forces of PMI and billionaire Lucio Tan's Fortune Tobacco Corporation (FTC), is leading the charge for Filipinos to embrace a greener vice.

"We have seen ample evidence that Filipino legal age smokers are ready to switch to better alternatives than burned tobacco, [such as] heated tobacco, oral nicotine patches, and electronic vapes,," said PMFTC President Denis Gorkun in an exclusive interview with Manila Bulletin Business.

The PMFTC opened the manufacturing facility in Tanauan City, Batangas to produce the heat sticks (BLENDS) used for its smoke-free alternative product line BONDS by IQOS, catered to the Philippine market, and the larger Asian market as a whole. In the country, PMFTC sells two product lines, high-end IQOS and BONDS by IQOS, which is its more affordable version.

"The key is that we enable the logistics in place to make sure that we are able to communicate to smokers the reasons why it is much better to switch to the alternatives that are going to be made in this factory, because they are much, much better than continuation of smoking cigarettes. If that process happens quickly, which we hope it will, the revenues replacing cigarettes can ramp up very fast," said Gorkun.

While the company adheres to the PMI's goals, Gorkun noted that the transition is not an easy endeavor.

"It's an expensive, investment-intensive effort, the effort in both technology and investment, into educating the legal age smokers to switch. It's a tremendous undertaking," he said.

However, Gorkun remains optimistic in the Philippines' potential, saying that the goal is "very near, to see the future without cigarettes in many markets."

"The Philippines has stepped on the journey a little bit later, so we're much younger, but it will happen eventually," he remarked.

PMI has seen positive response in their smoke-free alternatives, with Gorkun citing how the revenue share of these product lines in some countries like Japan and states in Europe have surpassed 50 percent.

Does this indicate a future wherein PMI and PMFTC eventually halt the sale and production of traditional cigarettes? Gorkun said the answer remains "dependent on consumer preferences."

"If there is an insignificant portion of consumers that are left to serve with the traditional cigarettes, and if economically viable, then we'll be most happy to discontinue cigarettes.  But, so far this goal is probably a decade or more away," he said.