Philip Morris to Put up $20-M Tobacco Warehouse in Subic

Source from:  By BEBOT SISON JR. The Philippine Star  09/20/2007

Philip Morris International (PMI), one of the biggest tobacco companies in the world, will invest more than $20 million here for a tobacco leaf warehouse to serve its various markets in the Asia-Pacific region. Subic Bay Metropolitan Authority (SBMA) administrator Armand Arreza said PMI managing director Christopher James Nelson personally briefed President Arroyo last Friday in Malacañang on the company's investment plans. "The President was very pleased about this project because Philip Morris has chosen Subic for its transshipment hub over other destinations in the region such as Singapore, Hong Kong, and Malaysia," Arreza told The STAR. "This project also shows the confidence of locators in the Subic Bay Freeport when it comes to efficiency and cost effectiveness," he added. Nelson said PMI will initially spend $600,000 to refurbish a warehouse in Subic before constructing a P20-million facility in 2009 to establish a bigger transshipment operation based in Subic. Nelson said PMI will refurbish an existing Subic warehouse so that it can hold about six million tons of tobacco leaf. On the other hand, the warehouse to be constructed in 2009 would accommodate 25 million tons, he added. The second warehouse would increase the firm's operations four-fold. Nelson said the first Subic warehouse will be ready by the first week of November and that the first transshipment has been scheduled on Nov. 9. The PMI official also said the Subic Bay Freeport was chosen for the firm's regional transshipment hub because of its logistical advantages. "We looked at it from the viewpoint of location symmetry, cost-effectiveness, and the technical side. The facilities are there in Subic, and we also considered the support we got from the community, especially from (SBMA) chairman Salonga and administrator Arreza," he said. Meanwhile, Sen. Richard Gordon said the entry of Philip Morris would further enhance Subic's potentials, which is in consonance with President Arroyo's program to make Subic a prime logistics and services hub in the Asia-Pacific region. "We are bringing back the glory of Subic," Gordon said. "With the leadership of chairman Salonga and administrator Arreza, we are ridding Subic of the bad images and bringing in high-impact projects like the $1.6-billion Hanjin investment. Now, we have Philip Morris, and next will be a Chinese glass company and many more," he added. The Subic warehouse is the second major investment by Philip Morris in the country. In 2003, it invested some $300 million for a state-of-the-art tobacco factory in Batangas and had since become the primary buyer of locally-produced tobacco leaf. The company also developed the local Isabela Burley tobacco, the only Philippine-grown leaf that passed international standards, and which is now exported to the United States, Turkey, Kazakhstan, Ukraine, Malaysia and Australia. The Switzerland-based Philip Morris International is a part of the Altria Group, Inc., one of the world's leading tobacco companies. The company currently holds a 15-percent share of the international cigarette market and employs more than 80,000 people worldwide, with brands made in more than 50 factories around the world and sold in over 160 countries. Enditem