Tobacco company – Philip Morris Hut will invest more than CHF 3 billion in Switzerland in 2020
Last year alone, the US group invested around 3.6 billion US dollars or around 3.3 billion Swiss francs in this country. The billions of Americans went into research and development (R&D), salaries, the purchase of goods and services and invested in the factory in Neuchâtel, as Dominique Leroux said in an interview with the AWP news agency. Leroux is the head of the Swiss subsidiary of the group.
“Research and development spending alone last year is estimated at $ 420 million,” said Leroux, pointing out that everything has quickly gone into smoke-free alternatives, the new niche in which Philip Morris wants to distinguish itself. The Iqos brand e-cigarettes are an important part of this.
150,000 bald head users
That with Iqos is growing in Switzerland: Compared to Iqos, the market share of Iqos was 5.7 percent of tobacco products including cigarettes in the third quarter, which corresponds to an increase of 1.9 percentage points (PP) in the comparison period 2020. “In Zurich, Iqos’ market share even reached 7.4 percent,” said Leroux. Philip Morris hopes to reach 150,000 users with Iqos in Switzerland “in the next few months”.
But there are also problems. Like other electronic devices, Iqos have difficulty sourcing semiconductors. The “tense situation” is likely to persist until the first half of 2022, but the Swiss boss finally wants to prioritize replacement products for existing customers, “above all to prevent a return to smoking”.
“We’re not going to remove any product from the range, but we have to deal with deliveries that are not just-in-time like normal times,” Leroux continued. When asked about possible price increases, he declares that such increases are not on the agenda for the Swiss market.
New branch planned in Geneva
The company currently operates five Iqos stores in Switzerland: one each in Lausanne, Bern, St. Gallen and two in Zurich. “Due to the pandemic, we are rather cautious with the network in Switzerland. But we plan to open a branch in Geneva by the end of the year,” said Leroux.
In Switzerland, PMI employs over 3,000 people in the various business areas, most of them in the global operations center in Lausanne. In the past two years, the group-initiated converts resulted in the loss of 250 jobs. Leroux confirmed that the 200 employees at the Swiss branch and the employees at the Neuchâtel plant were not affected by this change.
In total, more than 650 people left the company as part of the renovation, more than a third through voluntary resignations. And in return, more than 400 new employees were hired.
(AWP)