Following the announcement made on March 9, 2022, Philip Morris International Inc. (NYSE: PM) announced today the specific measures they have taken to temporarily halt investment plans and reduce their manufacturing business in Russia. PMI has taken the following actions:
Philip Morris International (PMI) has stopped offering some cigarette products in the market and reduced manufacturing activities accordingly. It has also halted marketing activities in the country and cancelled plans to launch all products, including its IQOS ILUMA flagship heated tobacco product in Russia by 2022. Plans to produce over 20 billion TEREA sticks (used for IQOS ILUMA) in Russia and invest $150 million have also been cancelled. Additionally, PMI's board of directors and senior executives are exploring options for an orderly exit from the Russian market due to the increasingly complex and rapidly changing regulatory and operational environment.
In the past four weeks, our main focus and all efforts have been to ensure the safety and security of our colleagues in Ukraine. We stand in solidarity with innocent men, women, and children who are suffering. "We employ over 3,200 people in Russia," said CEO Jacek Olczak. "We will continue to support them, including paying their salaries, and we will fulfill our legal obligations. Our priority will be to make decisions based on their safety and security.
As previously reported, Russia accounted for nearly 10% of PMI's total shipments in 2021, representing approximately 6% of the company's net income. PMI is set to release its Q1 2022 earnings announcement on April 21, 2022, which will include updated financial projections for the year.
Philip Morris International: Achieving a Smoke-Free Future
Philip Morris International (PMI) is a leading international tobacco company committed to achieving a smoke-free future and long-term development of its investment portfolio to include products beyond the tobacco and nicotine sectors. The company's current product portfolio primarily consists of cigarettes and smoke-free products, including non-combustible heated, vapor, and orally consumed nicotine products, sold in markets outside the United States. Since 2008, PMI has invested over $9 billion to develop, scientifically validate, and commercialize smoke-free products for adult smokers who would otherwise continue smoking, with the goal of completely phasing out cigarette sales. This includes establishing world-class scientific evaluation capabilities, particularly in pre-clinical systematic toxicology, clinical and behavioural research, and post-market studies. The United States Food and Drug Administration (FDA) has authorized PMI's IQOS platform 1 device and consumables for marketing as a modified risk tobacco product (MRTP), concluding that the exposure modifications are appropriate for promoting public health. As of December 31, 2021, PMI's smoke-free products are available in 71 markets, and PMI estimates that approximately 15.3 million adult smokers have switched to IQOS and quit smoking globally. With a strong foundation in life sciences and expertise, PMI announced in February 2021 its ambitious expansion into the healthcare and medical sector, offering innovative products and solutions to meet unmet patient and consumer needs.
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The Philip Morris International (PMI) has announced the specific steps it will take to reduce its business operations in the Russian Federation, as well as its intent to withdraw from the market.
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