$600 Million Investment to Boost Zyn Production
Philip Morris International announced a substantial investment of $600 million to establish a manufacturing facility in Colorado. This new plant will focus on producing Zyn nicotine pouches to cater to the growing demand for alternatives to traditional tobacco products in the U.S. The facility is slated to commence preliminary operations by 2025 and is expected to create 500 jobs in the state. The investment will be made over the next two years through one of Philip Morris’s U.S. affiliates.
Strategic Move Following Swedish Match Acquisition
Philip Morris entered the U.S. market after acquiring Swedish Match, the parent company of Zyn, in a $16 billion deal in 2022. This move aligns with the company’s strategy to provide alternatives to traditional cigarettes amid increasing health awareness and stricter regulations. The demand for Zyn in the United States has been robust, with shipments rising nearly 80% in the first quarter compared to the previous year. Despite this growth, Philip Morris temporarily suspended nationwide sales on Zyn.com in June following a subpoena from the District of Columbia regarding compliance with the state’s 2022 ban on flavored tobacco sales.
IQOS Expansion Plans and Regulatory Challenges
In addition to expanding Zyn production, Philip Morris is gearing up to launch its flagship heated tobacco device, IQOS, in the U.S. A test rollout is expected in the second quarter, with the company set to report on this next week. However, these plans have faced opposition from anti-tobacco and health groups. These groups have written to the U.S. Food and Drug Administration to contest the IQOS-related applications that Philip Morris has submitted to the agency, as reported by Reuters earlier on Tuesday.
