Philip Morris International plans to invest $232 million (€207.9 million) to expand production capacity for ZYN nicotine pouches at its Ownesboro, Kentucky plant, to meet the strong demand.
The investment will be made through one of PMI's Swedish Match affiliates, and comes about a month after the tobacco giant announced an investment of $600 million (€537.7 million) to open a ZYN manufacturing facility in Colorado.
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.
ZYN, an alternative to traditional chewing tobacco products, is a nicotine pouch, which, according to Philip Morris, does not contain tobacco.
Philip Morris bought Zyn-parent Swedish Match in a $16 billion (€14.3 billion) deal in 2022, as tobacco companies vied for alternatives to traditional tobacco products in their portfolio amid greater health awareness and stricter regulations.
In June, PMI suspended online sales at ZYN.com across the US after it received a subpoena from the District of Columbia requesting information about its compliance with DC's 2022 ban on the sale of all flavoured tobacco.
Supply Gaps
There were also concerns that illicit sales of ZYN – amid supply gaps – could chip away at the numbers for PMI during the company's second-quarter conference call in July.
Construction for expansion of the Kentucky facility was underway, and PMI expects to complete it by the second quarter of 2025.
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.
The company had said in July the expansion was expected to provide around 900 million cans of capacity for ZYN for 2025.
