Philip Morris International said on Tuesday it would invest $232 million to expand production capacity for ZYN nicotine pouches at its Ownesboro, Kentucky plant, to meet the strong demand.<\/p>\n
The investment will be made through one of PMI\u2019s Swedish Match affiliates, and comes about a month after the tobacco giant announced an investment of $600 million to open a ZYN manufacturing facility in Colorado.<\/p>\n
Shipments of ZYN slowed to a growth of 54% in the second quarter, reported in July, as demand for the product created short-term supply chain constraints and impacted volume growth.<\/p>\n
ZYN, an alternative to traditional chewing tobacco products, is a nicotine pouch, which, according to Philip Morris, does not contain tobacco.<\/p>\n
Philip Morris bought Zyn-parent Swedish Match in a $16 billion deal in 2022, as tobacco companies vied for alternatives to traditional tobacco products in their portfolio amid greater health awareness and stricter regulations.<\/p>\n
In June, PMI suspended online sales at ZYN.com across the U.S. after it received a subpoena from the District of Columbia requesting information about its compliance with D.C.\u2019s 2022 ban on the sale of all flavored tobacco.<\/p>\n
There were also concerns that illicit sales of ZYN \u2014 amid supply gaps \u2014 could chip away at the numbers for PMI during the company\u2019s second-quarter conference call in July.<\/p>\n
Construction for expansion of the Kentucky facility was underway, and PMI expects to complete it by the second quarter of 2025.<\/p>\n
In order to boost production, the facility will operate at a 24-hour, seven-days-a-week basis starting from the fourth quarter this year, PMI said.<\/p>\n
The company had said in July the expansion was expected to provide around 900 million cans of capacity for ZYN for 2025.<\/p>\n<\/p>\n
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