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PMI hails partnership with Lucio Tan group

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The newly appointed chief executive of cigarette manufacturer Philip Morris International Inc. (PMI) said he is “very happy” with the company’s partnership with the Lucio Tan group.

“Our business combination with the Tan family has proven to be very successful and we are very happy with this partnership; I am very happy with this partnership. It is an example of actually of a good partnership with great companies. It is one plus one is equals to more than two and that’s an example of how that can work,” Jacek Olczak, the newly-appointed Philip Morris CEO, said.

Olczak was appointed as CEO of the company last week. He used to serve as Philip Morris’ chief operating officer.

He replaced J. André Calantzopoulos, who served as the company’s CEO from 2013 until May 5, was appointed executive chairman of the company.

In February 2010, the operations of Philip Morris, which manufacturers Marlboro and its flagship product Philip Morris cigarettes, has combined with Tan’s Fortune Tobacco Corp., which mainly manufactures cheap products, such as Fortune and Mark cigarettes.

Both companies have an almost equal economic share of the company it called PMFTC Inc., with Tan serving as chairman but the day-to-day operations are being handled by Philip Morris.

At some point, PMFTC’s market share reached more than 90 percent, but this was eroded by its competitors, led by Mighty Corp.

In 2018, PMFTC’s market share was reduced to more than 70 percent and some 29 percent by Japan Tobacco International Philippines, which bought Mighty Corp. in 2017.

Olczak said its local affiliate PMFTC was able to roll out its IQOS in Metro Manila, now with 15 stores, in the middle of last year despite the ravaging effects of the pandemic.

IQOS or short for “I Quit Ordinary Smoking” is a device in which a tobacco stick is heated and not burned.

Olczak said he has committed to accelerating Philip Morris’ smoke-free transformation, announced in 2016, which envisions more people switching to heated tobacco using its device than burning it.

The company is focused on developing, scientifically substantiating, and responsibly commercializing smoke-free products that are less harmful than smoking, with the aim of replacing cigarettes as soon as possible, it said.

Olczak has been a vital driver of PMI’s smoke-free transformation, which moved into its commercialization phase with the launch of IQOS in Nagoya, Japan, in 2014. Under his oversight as COO, the company increased the portion of its net revenues derived from smoke-free products to 28 percent in the first quarter.

Read full article on BusinessMirror

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