As smoke-free nicotine products grow in popularity, one of the world’s largest tobacco companies is spending up and hiring hundreds to boost its nicotine pouch production.
Tobacco Expansion
Cigarette smoking may be dying out among Americans, but a new development in Kentucky proves the tobacco industry is far from dead.
Kentucky Plans
Global tobacco company Philip Morris International has announced plans to expand its production capacity at one of its plants in Owensboro, Kentucky, where it produces ZYN nicotine pouches.
$232 Million Investment
The multinational corporation announced the news on Tuesday, confirming that it planned to invest $232 million into the expansion of the Swedish Match plant through one of its Swedish Match affiliates.
Ramping Up Production
The expansion to the existing facility is expected to ramp up production from a standard five days per week to 24/7 operations. It will also create an additional 450 jobs for Owensboro and the wider area.
Smoke-Free Shift
The expansion is part of the company’s transition toward more smoke-free products, and to match increasing demand for the popular ZYN pouches as more Americans opt to curb their smoking habits.
“Toward a Smoke-Free Future”
“We are accelerating our mission toward a smoke-free future, working with our U.S. affiliates to move adults away from cigarettes and other traditional tobacco products by providing better alternatives,” US CEO Stacey Kennedy said in a press release.
ZYN Pouches
ZYN pouches are a smoke-free nicotine product that is placed in the mouth, allowing nicotine to be absorbed directly into the bloodstream through the gum and upper lip.
Declining Demand for Cigarettes
Smoking bans, both for enclosed and outdoor public spaces, have become widespread across the US in recent decades, with cigarette smoking becoming an increasingly anti-social habit among young Americans.
Boom in Popularity
Image Credit: Shutterstock / Alexanderstock23
However, demand for ZYN pouches has only increased in the last year due to online virality, becoming one of the most popular nicotine products in the US.
Huge Sales Growth
In the first quarter of 2024, PMI announced that its ZYN sales had grown by 80% since the same time last year, with ZYN products making up three-quarters of nicotine pouch sales.
Second Quarter Cooling
Image Credit: Shutterstock / Andrey_Popov
In the second quarter, growth slowed 54%, according to PMI’s most recent earnings call.
900 Million Cans
According to the company, this new Owensboro expansion is expected to boost production capacity by approximately 900 million cans of ZYN.
Community Praise
Kentucky Governor Andy Beshear praised the company in a statement announcing the new investment on Tuesday. “Our economy continues to set records, and today’s announcement shows we’re bringing jobs to our people instead of making our people move to the jobs,” Beshear said.
Doubling Down
“I want to thank and congratulate company leadership for doubling down here in the commonwealth and look forward to many more years of prosperity,” he added.
Business Leaders Celebrate
Business and economic leaders in the city are also celebrating the news and its ramifications for communities in Owensboro, including Claude Bacon, president and CEO of Greater Owensboro Economic Development Corp.
A Positive Impact
“An expansion of this magnitude creates additional high-quality and high-paying jobs, positively impacting families in our community,” Bacon said in a press release. “Greater Owensboro is in fact greater because of incredible companies like Swedish Match.”
Owensboro, Kentucky
Owensboro is the fourth most populous city in Kentucky, with a population of just over 60,000 according to 2020 census data. It is 106 miles southwest of Louisville, the state’s biggest city.
Swedish Match
Swedish Match is a PMI subsidiary that produces specialty tobacco products such as snus, nicotine pouches, chewing tobacco, cigars, and lighters. It has been operating the plant in Owensboro since 1973.
Completed in 2025
The new expansion has already begun, and PMI believes it will be completed by midway through 2025. 24/7 operations at the company will pre-empt its completion, beginning at the end of the year.
Colorado Plans
The expansion announcement comes just over a month after PMI announced its plans to invest $600 million in a new ZYN manufacturing facility in Colorado which is expected to create 500 jobs in the state by 2025.
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