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Philip Morris to build new Subic warehouse

Thursday, October 30, 2008 [ manilatimes.net ]


TANAUAN City, Batangas: Philip Morris Philippines Manufacturing Inc. (PMPMI) on Wednesday said it would build a new tobacco leaf warehouse at the Subic Bay Freeport next year.


Chris Nelson, Philip Morris managing director, announced its expansion during the inauguration of the company’s newly opened 3,500 square meter P70-million finished goods warehouse at the First Philippine Industrial Park in this city. The new facility has a storage capacity of one billion sticks of cigarettes.


“We have been increasing local production of some segments, and we need more space to store the cigarettes before we distribute them to the local market or export them mainly to Thailand,” Nelson said without providing details on its production increase.


“Despite the current global economic challenges, we are expanding. We are growing. And this is good news to the Philippine economy in general and the local tobacco industry in particular,” the executive said in his speech during the inaugural rites.


The cigarette manufacturer is already operating a finished goods warehouse in this city that could store 800,000 million sticks. PMPMI’s manufacturing plant could produce around 40 billion sticks a year.


Nelson also said the company would push through with the construction of a new storage facility for tobacco leaves in the Subic Bay Freeport. This new tobacco-leaf warehouse would cost around P1 billion, he said, adding the capacity of the new facility would be about four times bigger than the 6,000-ton capacity of PMPMI’s existing tobacco-leaf warehouse in the same economic zone.


Nelson said that construction of the planned tobacco leaf warehouse starts next year and would be ready for use about 18 months later.


The executive said the company would further increase its purchase of tobacco leaves from local farmers. He said PMPMI products corner a 28-percent share of the local market, citing latest AC Nielsen data. Its fiercest competitor Fortune Tobacco Corp. holds around 60 percent of the market.


Nelson said that while PMPMI sells more of the premium brands, the company lately has increased sales in the low-priced segment dominated by Fortune Tobacco. He said the company’s third quarter sales results were “reasonable to good,” adding, “We are doing okay amid the fairly tough operating environment.”


PMPMI brands include Marlboro, Philip Morris, Bowling Gold, L&M, Miller, Miller Silver and Stork.


Nelson said PMPMI supports the Philippine government’s request to the World Trade Organization (WTO) that a panel be formed to resolve a trade dispute with Thailand over cigarettes.


The Philippines earlier filed a case against Thailand, alleging its neighbor violated WTO rules by setting higher customs values for Philippine cigarettes and raising maximum retail prices on imported cigarettes, as the former claimed that such measures were done to shield Thailand’s state-owned tobacco monopoly.


“We just hope that the governments of the Philippines get to settle the dispute in line with the principles of the WTO,” Nelson said.-- Ben Arnold O. De Vera

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