With more than 520 million euros worth of investments in the last five years, Papastratos, a subsidiary of the multinational Philip Morris International, continues pick up steam, responding to new challenges dynamically.
The new investment of 125 million euros in the Aspropyrgos factory, which the company had announced just last yearhas far exceeded this amount, said Mr. Christos Harpantidis, president and CEO advisor to Papastratos. The aim of the investment is to increase the production of heated tobacco sticks.
This investment comes after the completion of a previous project, amounting to 300 million, thanks to which it turned its factory into one of the leading production and export centers in the world for a new category of tobacco alternative products.
Read also: Papastratos: Expands its product portfolio
Besides increasing production lines, to boost exports, printing capability is being modernized with the full digitization of all printing lines, and more hirings are taking place according to Mr. Harpantidis.
At the moment, there are twelve (12) Papastratos production lines in Aspropyrgos.
Just 35% of the revenue from conventional cigarettes
The trajectory of Papastratos’ financial figures for the current financial year is positive according to the head of the company, with revenues showing a rise in high single digits.
It should be noted that already 65% of Papastratos’ net income comes from innovative, non-burnable products, with the aim of reaching 75% by 2023.
The good performance of Papastratos comes both from the increase in internal demand – where there have been no revaluations of the company’s products as noted by Mr. Harpantidis, and from the strengthening of exports. It is estimated that more than 85% of the total production this year will be directed to foreign markets, and this number is gradually increasing.
20% stake for IQOS
According to Mr. Harpantidis, there are 430,000 IQOS users in Greece, with the share increasing over the past six years.
As revealed by Mr. Iakovos Kargarotos, vice president of the Papastratos company, IQOS’s share reaches approximately 20%, “counting” the entire market (conventional cigarettes and alternative nicotine products).
In fact, Greece is considered one of the most successful markets for IQOS, out of a total of 71 where it is sold, as it is among the top 3-4 in Europe.
New perspectives for Papastratos
At the same time, Papastratos puts Greece in a privileged position in the internationally growing smokeless tobacco market.
In particular, a few days ago parent firm Philip Morris International made two important announcements regarding the US market:
– Papastratos has proceeded with the termination of its commercial partnership with the Altria group and from April 30, 2024, will have full rights to commercialize IQOS in the US.
– At the same time, it strengthened its offer for the acquisition of Swedish Match. Its potential partnership with Swedish Match will help PMI directly enter the US and compete in its growing smokeless product market, further developing Swedish Match’s portfolio of oral nicotine products.
Given that Papastratos occupies a dominant position in the international market of non-burning tobacco products, these two strategic moves by Philip Morris International create new growth prospects for the company and Greece as a whole.
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