In a recent interview with Interfax Ukraine, Massimo Andolina, the European Regional President of Philip Morris International (PMI), discussed the impact of Russia's invasion on multinational corporations in Ukraine. Andolina stated that PMI is exploring plans to restore production in Ukraine.
PMI has ceased production at its factory in Kharkiv due to ongoing security concerns resulting from the ongoing conflict. Currently, the company's brands in Ukraine are being temporarily produced by Imperial Tobacco. However, PMI intends to establish its own production facility in Ukraine.
Maximo Andolina emphasized two reasons for the decision: first, the desire to produce PMI's own products locally, and secondly, the company's commitment to investing in Ukraine even during times of war. He stated that PMI is actively exploring various alternative options for establishing new production facilities and plans to make relevant announcements in the near future.
The interview also touched on the decrease in PMI sales in the Ukrainian market. Massimo Andolina mentioned two factors: some people leaving the country or residing in occupied territory, resulting in consumer loss, and competition from illegal products. He stated that PMI has discussed with the government to address this issue and expressed confidence in the government's commitment to combating corruption and criminal activity. The company expects significant progress in combating illegal trade in the coming years.
Maximo Adonilna also shared his opinion on the government's decision to tax cigarettes and heated non-burning products. He stated that PMI believes these products should be considered different categories and taxed accordingly. They have noticed the success of heated tobacco products in the Ukrainian market and emphasized the necessity for differentiated tax treatment.
During the interview, the position of PMI in Russia was also addressed. According to Massimo Andolina, the company's top priority during the war was the protection of its Ukrainian employees' safety. Therefore, they temporarily suspended their investments in Russia and reduced their business operations. Despite PMI's previous announcement of its intention to withdraw from the Russian market, the changing regulatory environment has made it challenging for the company, which has significant business and assets in the country, to do so.
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PMI is considering restarting production in Ukraine.
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