Philip Morris International has announced a $232 million investment to expand production capacity for ZYN nicotine pouches at its plant in Owensboro, Kentucky. This comes after a previous investment of $600 million to open a ZYN manufacturing facility in Colorado. Demand for ZYN has been strong, with shipments growing by 54% in the second quarter, but supply chain constraints caused some challenges.
ZYN is a tobacco-free nicotine pouch that offers an alternative to traditional chewing tobacco products. PMI acquired ZYN-parent Swedish Match in a $16 billion deal in 2022 as tobacco companies sought alternatives to traditional products due to health awareness and regulations. In response to a subpoena from the District of Columbia regarding compliance with a ban on flavored tobacco sales, PMI suspended online sales at ZYN.com in the U.S.
Concerns about illicit sales of ZYN during supply gaps were raised during the company’s second-quarter conference call in July. Construction for the expansion of the Kentucky facility is underway, and PMI aims to complete it by the second quarter of 2025. The facility will operate 24/7 starting in the fourth quarter of this year in order to meet production demands. The expansion is expected to provide around 900 million cans of capacity for ZYN by 2025.
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