24 August 2009

Philip Morris starts phase 2 of P1-B Subic warehouse project

Philip Morris Philippines Manufacturing Inc. (PMPMI) has signed a 50-year lease agreement with the Subic Bay Metropolitan Authority (SBMA), increasing the company’s investment here and paving the way for the construction of a P1-billion tobacco leaf regional warehouse.

In the lease agreement signed by SBMA administrator Armand Arreza and PMPMI managing director Christopher Nelson on Tuesday (Aug 18), PMMPI increased the total land area of its project here to 49,279 square meters, from the current 9,600-square meter warehouse it has refurbished when it started its Subic operation in 2007.

Once completed, the state-of-the-art warehouse will have a capacity to hold some 24,000 metric tons of tobacco. At present, the P30-million peso refurbished warehouse can only accommodate 6,100 metric tons.

Nelson said the new warehouse will boast of features like humidity control, fire suppression equipment, and air conditioning to handle the imported tobacco leaves from foreign suppliers, which will then be shipped and processed in cigarette manufacturing facilities in the Philippines, Malaysia and Indonesia.

According to Arreza, the agreement, which extended PMPMI’s lease agreement to 50 years, "strengthens Subic Bay Freeport’s competitive posture as South East Asia’s logistics hub, as envisioned by President Arroyo."

He added that this free port’s multi-modal transport (air-land-sea) capabilities, world-class infrastructures, modern road networks, and tax incentives might have prompted PMPMI to sign an agreement that spans half a century.

"A global brand such as Phillip Morris would not make hasty decisions, which means the firm has really found Subic an enviable logistics hub," said Arreza.

Just recently, Subic scored another milestone in its thrust to become a leading logistics hub when a major cargo forwarder based in the United States established its North Luzon hub in this free port, Arreza added.

Nelson, for his part, said that PMPMI continued to expand since their establishment here in 2007 at the Subic Technopark, and even posted growth during the global economic slowdown which hit the country in the last quarter of 2008.

Nelson added that the warehouse expansion is "a reflection of our faith in the Philippine government, particularly the SBMA."

The PMPMI managing director also expressed confidence that the company will sustain profitability and competence against its competitors, despite the increasing competition in the tobacco industry.

"If you plan well ahead, and stay committed, this country will reward you in many ways," Nelson said.

He added that the 50-year lease extension is another expression of PMPMI’s gratefulness to the Filipino people.

"It may be difficult to get us, but once you have us, it would be difficult for us to leave you," said Nelson.

Also on Tuesday, Nelson and other PMPMI executives visited the Nellie E. Brown Elementary School in Olongapo City to turn over the PMPMI-sponsored "Proficient Measures for Quality Education" project, which would benefit five local public elementary schools.

This project, which PMPMI said will be replicated in other areas such as Bataan, provides access to curriculum-based TV programs through the Knowledge Channel, in partnership with the Knowledge Channel Foundation Inc. (SBMA Corporate Communications)

PHOTO: SBMA administrator Armand Arreza and PMPMI managing director Christopher Nelson sign an agreement expanding and extending the firm’s regional leaf tobacco warehouse project in the Subic Bay Freeport Zone.