Philip Morris International has selected Aurora for a new manufacturing plant to make its popular ZYN nicotine pouches, a product marketed to people wanting to stop smoking or chewing tobacco.
PMI plans to invest $600 million in a new facility on empty land at 48th Avenue and Harvest Road. When it is up and running, the plant will employ 500 workers making an average annual wage of $90,000, according to the company.
“These 500 jobs are good jobs,” said Stacey Kennedy, CEO of PMI’s U.S. operations based in Stamford, Conn., at a news conference held Tuesday morning at the Colorado Freedom Memorial in Aurora.
Groundbreaking should happen later this year, with completion by late next year and manufacturing starting in early 2026. The company already has a few jobs posted online for the Aurora facility with more available as construction nears completion next year.
“This project marks a significant investment in PMI’s vision for a smoke-free future,” Kennedy said.
Given the popularity of the pouches, the 500 jobs could represent a starting point, and Kennedy said the investment should provide $550 million in ongoing benefits to the area economy.
“PMI is making a significant investment in our community in a variety of ways,” Aurora Mayor Mike Coffman said at the conference.
ZYN is an oral pouch that contains nicotine salts with different flavors like citrus, coffee and spearmint. While not a tobacco product per say, U.S. regulators supervise it and are concerned that teenagers and children might develop a substance use disorder while using nicotine pouches, which have become popular among Generation Z.
PMI said it strictly limits sales to those 21 or older and doesn’t use social media influencers to promote its product or feature people under age 35 in its marketing materials in the U.S. Vendors must use independent age-verification systems like “Double Verify.”
The U.S. has about 30 million smokers and the pouches have become popular with those trying to wean themselves off tobacco, so much so that a ZYN plant in Owensboro, Ky., has struggled to keep up with demand. Swedish Match, which PMI acquired in 2022, opened that plant in 2016.
Kennedy said Colorado was one of seven states the company considered for an expansion. It rose to the top based on the economic opportunity it provided and its leadership in public health.
PMI spun off from Philip Morris USA and its parent Altria in 2008 and claims to have never sold a cigarette in the United States, although it does sell them in 180 countries and controls the Marlboro brand abroad. In the United States, PMI has focused on smoke-free alternatives for adults trying to transition away from cigarettes, spending $12.5 billion on research and product development in that area.
It is rolling out its latest version of the IQOS electronically heated tobacco devices in the U.S., which has generated criticism from health and anti-tobacco advocates.
The PMI plant represents a new kind of manufacturing win for Colorado, which in the past couple of years drew in battery and semiconductor manufacturers looking to take advantage of federal tax breaks.
Aurora provided $7.1 million in tax rebates to PMI for the new plant, while the Colorado Economic Development Commission approved $4.5 million in job growth incentive tax credits and Adams County chipped in another $4.3 million, said Yurly Gorlov, vice president of the Aurora Economic Development Council.
Working in Aurora’s favor was the availability of a ready-to-develop parcel, Gorlov said. The parcel PMI chose is among a handful of Xcel Energy-certified sites available. The electrical supply for the location was already planned out, which allows for a shorter completion time.
Gov. Jared Polis, who also spoke at the news conference, cited three advantages Colorado had in beating out other states. First were the logistics and accessibility via rail, air and truck routes. The state’s workforce is also a draw, and Polis noted that recently passed legislation makes community college tuition-free for residents earning under $90,000 a year starting this fall.
He also cited a reduction of 15% to 20% in the state’s commercial property tax rate, which could sway more siting decisions by companies looking to invest for the long haul in the state.
Kennedy said PMI plans to make significant philanthropic contributions worth $2.5 million with a focus on military veterans in the state, including $350,000 over two years to the Rocky Mountain Veterans Advocacy Project, a legal clinic; $100,000 to the Veterans Community Project, and additional donations to Colorado Gold Star Mothers, the Colorado Freedom Memorial, Hire Heroes USA, Soldier’s Angels and Musicians on Call for Veterans Administration hospital visits.
The company has also committed $250,000 annually for the next eight years to support a flexible housing fund for transitional housing in Aurora and Adams County.
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Originally Published: July 16, 2024 at 5:01 p.m.
