"Philip Morris" invests 1 million Euros in the modernization of the plant of Otopeni

This year, "Philip Morris" Romania will invest 1 million Euros in the modernization of the plant it owns in Otopeni, with the investment consisting in the installation of a new, more energy efficient cooling unit, said Andrei Vasilescu, Corporate Affairs Director at Philip Morris for Romania and Bulgaria. The official of the cigarette maker expects this type of investment to generate a 5% drop in the plant's energy consumption, starting with 2012. The investment is part of a wider program, whose goal is intended to lower its environmental impact, by lowering the consumption of natural resources, of greenhouse gas emissions and of the quantity of generated waste.

In November 1997, "Philip Morris International" Inc. (PMI) decided to invest in a new production facility in Romania. The location chosen was Otopeni, where it built a latest generation plant, equipped to produce all of the international brands of Philip Morris at the highest quality standards. The initial investment in the plant was 100 million dollars. Since then, the company has continuously invested in the development and the modernization of the plant.

Over 80 % of the output of Otopeni is intended for exports in over 15 countries: Italy (the biggest market for the plant of Otopeni), Poland, Bulgaria, Bosnia Herzegovina, Spain, Czech Republic, Slovakia, etc.

In Romania, "Philip Morris" has approximately 800 employees, of which approximately 500 work at their plant of Otopeni.

"Philip Morris" Romania is an affiliated company of PMI, ranked among the top largest across the world in the world's tobacco industry, owning seven of the top 15 brands. PMI products are sold in over 180 countries. In 2010, PMI held 16% of the cigarette market outside the US, or 27.6%, excluding China or the US, according to data by "Philip Morris".

The main products which the company sells on the Romanian market are "Marlboro", "Parliament", "Virginia Slims", L&M, "Philip Morris", "Chesterfield".

• Vasilescu: The local police should be given clear rights when it comes to punishing the illegal sales of cigarettes in public markets

"According to data by Novel, the black market for cigarettes had an upward trend, reaching 15% in November last year, compared to 11.8% in September 2011. This basically amounted to a return to July 2011, in the context of continuous downward trend since 2010, and in the first part of 2011, respectively. This increase in the black market clearly shows that the combined efforts for fighting illicit trade must not be abandoned, but rather they need to be stepped up. In order for smuggling to return to a downward trend, there is still the need for the improvement and simplification of the legislative framework which regulates smuggling as well as tax evasion, for strict administrative and disciplinary measures. The stability and legislative predictability when it comes to fiscal policies (the abiding by the excise increase calendar - introduced through the Fiscal Code) is essential. The legal cigarette market must not be sabotaged through insufficiently tested regulations", Andrei Vasilescu considers.

He said that other measures needed in this regard would be the granting of clear skills to the local police to punish illegal sales of cigarettes in squares, the confiscation of the means of transportation used for smuggling, even if it hasn't been technically changed to allow for the concealed storage of the smuggled cigarettes: "Also, the efficient collaboration between the authorities of the state and the tobacco industry needs to continue through campaigns of information, education and awareness on counterfeit products and illicit trades, the conferences and seminars conducted with the financial support of the OLAF, training programs etc".

The decrease in the illicit trade leads to an increase in the legal sales of cigarettes, and considering that taxes account for 80% of the price of tobacco on the shelves, this means more money for the state budget, Andrei Vasilescu considers: "It must be emphasized that a drop of just 1% of the contraband market in cigarettes means an additional 30 million Euros in earnings to the state budget, and any such revenue means boosting the ability of the government to handle macroeconomic imbalances".