Philip Morris to restructure tobacco ops

An aerial view of the Philip Morris manufacturing plant in Seremban.

KUALA LUMPUR: Philip Morris (Malaysia) Sdn Bhd (PMM) said it will restructure its manufacturing operations in line with its decision to increase production of processed tobacco for export and discontinue local cigarette manufacturing.

The resulting change will double production capacity for processed tobacco, known as cast leaf, through a new RM70mil investment at PMM’s Seremban plant, making it the largest cast leaf plant in the world for Philip Morris International Inc (PMI).

PMM managing director Tarkan Demirbas said a combination of increasing costs related to cigarette manufacturing and the continued high level of the illicit cigarette trade in Malaysia were key drivers for the decision to discontinue local cigarette production.       

“However, we remain committed to investing in Malaysia, which is an ideal location for PMI to place its largest cast leaf plant globally given the efficiency of our current cast leaf operations, superior infrastructure and logistics services and a highly skilled workforce,” Demirbas said in a statement yesterday.

The restructuring exercise would eliminate about 220 full-time jobs related to cigarette manufacturing, he said.

Demirbas said cigarette making in the Seremban plant would be wound down over the coming months.

“Subject to all necessary regulatory approvals, all PMM brands for sale in Malaysia today, including Marlboro and L&M, will be fully imported as of the second quarter of 2013,” he noted. — Bernama