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Philip Morris International to Invest up to €500 Million in Reduced-Risk Product Manufacturing Facility in Italy

[By NBC-1TV H. J Yook]Philip Morris International Inc. (“PMI”) (NYSE / Euronext Paris: PM) today announced an investment of up to €500 million into its first manufacturing facility in the European Union and an associated pilot plant near Bologna, Italy to produce its potentially reduced-risk tobacco products. Once fully operational, the factory and pilot plant combined annual production capacity is expected to reach up to 30 billion units by 2016.

“The development and commercialization of reduced-risk products represents a significant step toward achieving the public health objective of harm reduction, a potential paradigm shift for the industry, and an important growth opportunity for PMI. This first factory investment is a milestone in our roadmap toward making these products available to adult smokers,“ said André Calantzopoulos, PMI’s Chief Executive Officer. ”This investment underscores our strong commitment to Italy and in particular to the Bologna region which is not only home to our state-of-the-art filter factory, Intertaba, located in Zola Predosa, but also offers great infrastructure and, most importantly, access to exceptional human talent."

Construction on the new facility is expected to begin immediately and last approximately two years. Once fully operational it will employ up to 600 people. The pilot plant is already near completion and will serve as the production facility for pilot and initial market launches. Importantly, the majority of the construction and manufacturing equipment will be procured from Italian companies and further benefit the country’s economy.

PMI’s investment in the development and rigorous scientific assessment of products with the potential to reduce the risks of smoking spans more than a decade. It encompasses a wide-range of tobacco and non-tobacco containing product platforms. In November 2013 PMI announced its plans to accelerate commercialization of one of its potentially reduced-risk products in the second half of 2014 in selected cities, prior to a full market launch in 2015. Specific markets for product launches will be announced at a later date.

Separately, PMI in December 2013 established a strategic framework with Altria Group, Inc. (“Altria”) under which Altria will make available its e-cigarette products exclusively to PMI for commercialization outside the United States. PMI plans to enter the e-cigarette market in the second half of 2014.



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