Philip Morris International (PMI) is counting on the Philippines as an important sourcing and manufacturing base as it strengthens supply-chain resilience against weather disruptions, geopolitical risks and other external shocks.
Vassilis Gkatzelis, PMI president for East and Southeast Asia, Pacific and Global Travel Retail, said the company takes a long-term approach to tobacco leaf procurement, using inventory buffers, diversified sourcing and supplier partnerships to protect operations from potential supply disruptions.
Asked whether the looming El Niño could affect tobacco leaf supplies, including those sourced from the Philippines, Gkatzelis said PMI anticipates weather-related risks across its global operations and plans accordingly.
“We always take a long-term view on how we plan our supply chain. This includes having the right levels of stocks around the world,” he said on the sidelines of Technovation Manila.
He declined to disclose whether PMI was increasing purchases from Philippine tobacco growers or alternative suppliers, describing procurement as an ongoing process managed by the company’s tobacco leaf specialists.
The pandemic and other global disruptions have reinforced the importance of anticipating supply risks and maintaining business continuity, he said.
The Philippines remains an important part of PMI’s regional and global operations, with investments exceeding USD2 billion since 2010 and a workforce of more than 5,000, according to Gkatzelis. PMI operates locally through PMFTC Inc.
“The Philippines is a manufacturing hub for PMI,” he said. “The Philippines is a very important market.”
PMI is also investing more than USD70 million to expand its smoke-free manufacturing facilities in Batangas, with completion targeted for 2027. The expanded capacity is expected to serve both domestic and export markets.
Gkatzelis said the company’s continued investments reflect confidence in the country’s business prospects, supported by local partnerships and value-added services that the Philippine operations provide to PMI’s wider global network.
The investments also underscore the country’s role beyond a consumer market, positioning it as a production and supply-chain base within the multinational’s regional manufacturing footprint.
