Philip Morris Fortune Tobacco Corp.Investing $50m More

Source from:  Manila Standard Today 12/03/2014

Philip Morris Fortune Tobacco Corp. is investing $50 million in Claveria, Misamis Oriental province, where the company helps in the leaf production of farmers.

"We got various projects, we have a lot of capex at the moment being used on several projects, particularly the one in Claveria," said PMFTC president Paul Riley.

Riley said PMFTC would invest the amount for research and development and other operational costs over a number of years.

"We're helping farmers down there now, so we're starting up a whole new operation down there because it's quite a unique project that we got going on there," he said.

"It's only the second place in the world where we grow tobacco twice a year, where up north, it's only once a year," Riley added.

PMFTC will invest to build curing box and seedlings provided to the tobacco leaf farmers. "We are not going away, so we plan to invest in the future," Riley said.

PMFTC buys about 50 percent of the total tobacco leaf production of the farmers in the Philippines to supply its manufacturing plant in Batangas province and Marikina City.

Riley said the ratio might decline as competition continued to tighten and taxes were expected to increase until 2016.

"We can only buy what we can produce, so if this thing [alleged questionable business practices of a competitor] continues, it might go down," he said.

Earlier, PMFTC disclosed to the public the findings of the Senate Tax Study and Research, showing the questionable practices of Bulacan-based competitor Mighty　Corp., including under declaration and diversion, or the sale of cigarettes for export to the local market.

"Our intention is to highlight key facts and data uncovered in the government report that points to Mighty's questionable business practices that not only harms legitimate tax-paying companies like us, but also significantly impacts key government programs as envisaged in the sin tax law," Riley said.

The company earlier said it would also stop exporting cigarettes to at least two countries, with the impending implementation of the cigarette tax stamp system.

Riley said exports to Korea and Pakistan from the Philippines would be stopped, because of the tax stamp and graphic health warnings on packages.

"One of the problems now with the exports is that when you export to a country that does not have tax stamps in that country, you have to apply the Philippine tax stamp. That's problematic," Riley said.

"We export to Korea. We export to Pakistan. Those exports will have to stop because we will put the Filipino tax stamp with a health warning. In Pakistan, they are not going to accept that," he said.

The Bureau of Internal Revenue earlier said the implementation of tax stamp system on cigarettes would cover tobacco products for the export markets. It said cigarette manufacturers would be required to affix the Philippine government's tax stamp, if the product's final destination had no security stamp system yet. Enditem