Cigarette smuggling falls to 15 percent, says Philip Morris

The new MD also spoke about local plans

The local branch of cigarette producer Phillip Morris International has a new managing director, Sergey Slipcenko, who came to the helm of the company this January. He declared today that the cigarette contraband in Romania has fallen to 14.7 percent from the staggering 36 percent registered last year. He stated that the company’s sales have therefore increased and that his main mission is for the company to reach the first position on the local market.

Slipcenkohas he held various management positions in marketing and sales in the Ukraine, among others. There he witnessed the growth of the company from the third to the first position. His long-term goal is therefore to do the same in Romania and as he added, he will stay here “for as long as it takes” in this purpose. 

Slipcenko also added that PMI does not intend to extend its product portfolio for the moment in Romanian, but to focus on the existing brands. He also spoke of a change in the company’s distribution system, which is now based on a external logistics service and functions while maintaining a track and trace system, which allows the tracking of the Philip Morris products which are diverted for being sold  in other markets than the the designated one.

The factory in Otopeni was also discussed at the conference, which ranks third in the world in terms of quality of the products manufactured here. Currently, 80 percent of what the factory produces is exported. Over 90 percent of these exports are directed towards Italy. Since 1997, EUR 120 million have been invested in the development of this factory, which had an uncertain future in 2010 and was temporarily closed then on account of the contraband issues. 

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The factory has also produced for Japan this year, for an estimate of two months and a quantity of 250 – 350 million cigarettes. No Romanian tobacco is used within the factory, since the local production is very poor and of low quality.

In 2010, Philip Morris Trading registered in Romania a turnover of over RON 2 billion, a net profit of just under RON 30 million and total revenues of more than RON 2 billion. Phillip Morris Romania recorded a turnover of over RON 139 million, a net profit of more than RON 23 million and total revenues of above RON 147 million.

In Romania, the company currently holds only a quarter of the total market and ranks second after its main competitor, British American Tobacco. Japan Tobacco International (JTI) is third. The best sold PMI brand both locally and internationally is Marlboro. PMI has an estimated 800 permanent employees locally and, Slipcenko stated, no new recruitment is being considered for the moment. ∫

Issues as EU’s project of branding prohibition and unique packaging were discussed by corporate affairs director, Andrei Vasilescu. He stated that such a measure, if applied, would facilitate falsified products and would break the right to intellectual property. Vasilescu applauded the formation of an inter-ministerial council dedicated specifically to issued connected with the cigarettes market, as he considered that it was highly necessary, given the restrictive legislation and contraband situations. In the EU, contraband holds around 10 percent of the market and this the target set for the local market as well, as Vasilescu added.

In Romania, the company currently only holds a quarter of the total market share and ranks second after its main competitor, British American Tobacco. JTI, Japan Tobacco international ranks third. The best sold brand of PMI both locally and internationally is Marlboro. PMI has an estimate of 800 permanent employees locally and, as Slipcenko stated, no new employments are being considered for the moment.

Corina Dumitrescu