Philip Morris Investing $680 Million to Make "Reduced-Risk" Tobacco Products

Philip Morris International  (NYSE: PM  ) announced today that it is investing €500 million ($684 million) in a new manufacturing facility and pilot plant in Italy to test and produce "potentially reduced-risk" tobacco products. Instead of burning tobacco, these products heat the leaves for a potentially less-harmful habit.

This will be Philip Morris' first European Union manufacturing facility, and the company expects annual production capacity to clock in as high as 30 billion units by 2016.

Philip Morris said it has been researching reduced-risk smoking products for more than 10 years. The company is pushing ahead with the products in select cities this fiscal year, with plans for a full market launch in 2015.

Philip Morris International is developing products that heat tobacco in a cigarette with a controlled heating mechanism or that use an aerosol nicotine-delivery system. While two of the technologies heat tobacco instead of burning it, one uses an electronic heater and the other uses a carbon heat source. It plans to pilot test its next-generation products later this year and launch a product that heats tobacco instead of burning it in 2015.

This latest announcement comes on the heels of Philip Morris International's December agreement with Altria Group to hand over  global commercialization of Altria's electronic cigarettes to Philip Morris. While Philip Morris is providing Altria two of its heated tobacco products for commercialization in the United States.

While Philip Morris will begin selling Altria's e-cigs outside the U.S. later this year, The Associated Press reported that the company ultimately expects its "next-generation" products to appeal more to smokers than electronic cigarettes.

-- Material from The Associated Press was used in this report.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2790825, ~/Articles/ArticleHandler.aspx, 3/28/2015 1:23:05 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!