PMFTC Plans to Expand Brand Portfolio

Source from:  Manila Bulletin 12/02/2015

Cigarette-maker Philip Morris Fortune Tobacco Corp. (PMFTC) Inc. plans to further expand its brand portfolio in the Philippines as the country's tobacco industry continued to be a "promising" market.

Roman Militsyn, PMFTC president said the local cigarette industry remains resilient despite the recent tax hikes and they expect stronger sales in the coming months due to increasing disposable income of Filipinos.

"I think we have a quite solid and strong portfolio of our brands. The major focus will continue to be on how we can grow the portfolio of our brands," Militsyn told reporters on the sidelines of Bright Leaf Journalism Awards.

"I would say that it is also a promising market because the Philippine economy is doing quite well and we're also expected to do quite well. The disposable income of people here is very very positive," he added.

Meanwhile, Militsyn said PMFTC saw some improvements in terms in earnings this year.

"We are actually demonstrating growth so that is why we are optimistic that we continue to do well. I think that we will be in a good position entering the end of the year or beginning next year basing on the consumer off-take standpoint," Militsyn said.

PMFTC current controls up to 74 percent of the local cigarette market.

"It's difficult when you are already quite big to grow further, but that's the ambition of any company, to look further opportunities to grow. That's why we continue to focus in expanding our portfolio involving plants, and packaging to further satisfy the customer needs," he said.

Militsyn, who was appointed by Philip Morris International as its local chief executive last September, admitted that the Philippines is a challenging market, but with opportunity for further expansion.

"All in all its a much bigger market with a good potential going forward," the PMFTC chief said.

However, Militsyn said illicit trade is still a problem in the Philippines, adding tobacco stakeholders and the government should work together in addressing the growing number of untaxed cigarettes.

"It is challenging, the competition is strong," Militsyn said. "We need to continue to work on the illicit trade and make sure that there is a level playing field, make sure there is no contraband and counterfeit which is definitely a growing concern for us."

"As long as we continue as an industry to work in that direction plus the support and enforcement from government agencies I think the conditions for this market is very good," he added.

Earlier, Jacek Olczak, Philip Morris chief financial officer, said the company is seeing further signs of improvement in the Philippine market, which has benefited from the introduction of excise tax stamps earlier this year.

Last April, the Bureau of Internal Revenue implemented its regulation requiring all cigarette manufacturers, whether locally manufactured or imported, to affix tax stamps on cigarette packs.

Those packs that do not have the required tax stamps, BIR said are presumed to be illicit and expose the possessors of such packages to criminal prosecution for trying to evade taxes.

BIR Commissioner Kim S. Jacinto-Henares said that about five percent of cigarettes in the domestic market still do not bear the internal revenue stamps. Enditem