By Laura McGuire
The boss of cigarette company Philip Morris International, Jacek Olczak, has said he thinks he can “come up with an even better business”, as the Marlboro maker steams ahead with plans to amp up its selling of smoke-free products.
“We need to do something. I think we can come up with an even better business,” Olczak told The Times in reference to his decision to steer the tobacco company away from cigarettes.
In recent years, Philip Morris has been shifting from a global producer of cigarettes into a brand which sells electronic alternatives.
In 2021, the company also acquired pharmaceutical giant Vectura, which makes asthmatic inhalers, for £1bn.
The Polish businessman also snapped up the inhaler Asprihale through the acquisition of Otitopic, a US respiratory drugs development company, in August 2021.
However, the group’s health and wellbeing arm has faced challenges over the last year, with Philip Morris booking a $680m (£529m) impairment charge due to unsuccessful clinical trial results for its inhalable aspirin. The hit means the cigarette maker is no longer on track for the $1bn revenue it thought it would achieve by 2025.
Olczak defended the tobacco business’s diversification into health products.
“The combustible business actually provides the resources for the smoke-free business. When we were acquiring Vectura, people were telling us it was unethical because we will now make money on the drugs when we are selling the cigarettes,” Olczak told The Times.
“If they continue that sort of narrative, I don’t do Vectura and I don’t invest beyond tobacco. If we go backwards into that thinking, the only thing this company will continue doing is selling cigarettes. So there is no logic in this.”
Its half year results show that net revenue grew 14.5 per cent to $9bn and Philip Morris said that cigarette shipment volume declined by approximately 1.5 per cent to 2.5 per cent.
