Fimo International to create a smoke-free future, the development of new types of tobacco is gradually entering a better situation
Original Jane Foggy New World 7/27
When it comes to multinational tobacco giants, it’s tiffelmore International, a company that dates back to 1847. In the 2020 Fortune 500, Fillmore International ranked 421st, making it the only U.S. company in the tobacco industry to make the list.
The company’s headquarters has just moved from New York to Connecticut, and its operations center is still located in Lausanne, Switzerland. As of August 2020, Fillmore International employs approximately 73,500 people worldwide and sells its products to more than 180 markets with a large number of consumers. Its cigarette brand Marlboro is a global sensation and has become one of the most attractive and well-known international brands in the eyes of consumers around the world, ranking first in cigarette sales for many years.
As a traditional tobacco giant, Fermo International pioneered the vision of a “smoke-free future” and in 2014 led the introduction of IQOS, a leading heating tobacco product, which has become synonymous with new tobacco products and proved that its strategy is forward-looking. In the research and development of heating tobacco products, Fimo International led the way, its harm reduction product revenue continued to rise, as the first quarter of 2021, heating tobacco shipments increased by 29.9% to 21.7 billion units. By contrast, other tobacco giants are slightly behind in the layout of heated tobacco products.
Transforming the concept IQOS leads the heating tobacco
Against the backdrop of a tighter global tobacco control environment and growing public health awareness, The traditional cigarette sales at Fillmore International are also declining, with negative year-on-year growth in all quarters since 2018 and multiple lawsuits related to smoking victimization. In response to this trend, Fermo International has timely layout of smoke-free products with the goal of maintaining tobacco taste as much as possible while reducing tobacco hazards.
Since 2009, Fimo International has hired more than 400 scientists and industry experts to invest more than $4.5 billion in research and development and scientific research on low-risk products (RRPs). According to the company’s 2019 comprehensive report, in 2016 and 2017, Fermo International allocated more than 70% of its research and development spending to risk-reducing products;is to spend 98% of research and development expenditure and 71% of total business expenditure on smoke-free products. The significant investment in research and development demonstrates The determination and confidence of Fimo International to launch new tobacco products and achieve future smoke-free goals.
For the vision of a smoke-free future, Fimo International has gradually achieved one goal after another and has issued progress expectations. In 2014, Fillmore International invested approximately US$680 million to establish its first RRP plant in Italy and launched IQOS in Milan, Italy, and Nagoya, Japan, in the same year. In May 2017, a PMTA application was submitted for IQOS. In 2018, IQOS 3 and IQOS 3 MULTI will be rolled out worldwide in Tokyo, Japan. In April 2019, the FDA authorized IQOS to be sold in the United States, and in the same year, IQOS3 DUO was launched, improving battery life and product replacement to give the company new growth momentum.
In July 2020, IQOS was licensed as the first of its kind to improve risk tobacco products (MRTP). On May 7, 2021, the limited edition product “IQOS 3 DUO Moon Silver” was released in Japan and sold in tobacco and convenience stores throughout Japan. The company plans to launch ILUMA IQOS in the second half of 2021. In the future, Fimo International will introduce equipment that uses new technologies and consider expanding the capabilities of heating equipment. In addition to providing age verification to prevent minors from smoking, the company will begin developing an app to help smokers manage their health.
IQOS added 1.5 million subscribers in the first quarter of 2021, well above its historical average of 1 million new users per quarter, according to TheMoe International’s first-quarter results. Solid conversion rates of 70 to 80 per cent continue to dwarf the average conversion rate for many steam products. Today, IQOS devices are available in 66 markets around the world, with a user base of 19.1 million, of whom 14 million have quit smoking and are fully converted to IQOS. Strong growth in IQOS boosted revenue in the RRP category, which rose 36.5 percent to $2.122 billion in the first quarter.
By 2025, Fillmore International plans to generate 38% of its heating tobacco revenue, with sales exceeding 250 billion units, and at least 40 million users of smoke-free products converted from traditional cigarettes worldwide, with at least 30% of the products on the market coming from smoke-free products. It is also proposed to end cigarette sales in many countries within 10 to 15 yearsthe view of sale, first in Japan.
Four platforms to work together to comprehensively help the smoke-free future
From the above can be seen, Fimo International has made IQOS into the most trustworthy brand of its kind. Instead of stopping there, however, the company took advantage of technology acceleration to extend its lead to steam e-cigarettes, expanding its RRP portfolio and competitive advantage with different product formats, technologies and experiences.
Fimo International’s harm reduction product research and development is divided into four platform multi-line promotion. Platform 1 and Platform 2 are heated tobacco products, Platform 3 and Platform 4 are steam atomized e-cigarette products. Platform 1 and Platform 2 use thermal control technology to heat tobacco to between 250-350 degrees C, compared with traditional cigarettes, the average reduction of 90-95% of HPHCs content. Platform 3 and Platform 4 products do not contain tobacco, but instead deliver nicotine through HPHCs-free aerosols (e.g. glycerin). All four platforms take IQOS as the brand name, IQOS thermal control technology as the core technology, to build a full range of harm reduction product line.
Platform 1 products for electric heating tobacco products, lithium battery as a power source, inserted into the exclusive smoke bomb, the use of electronically controlled ceramic heating plate in a specific temperature range (no more than 350 degrees C) heating tobacco, the production of aerosol containing nicotine, the user inhaled through the nozzle. Using this heating method can reduce the harmful and potentially harmful components of smoke by an average of 95%. Among The New ProductS From Fimo International, The Main ProductS Such As IQOS 3, IQOS 3 Multi And IQOS3 DUO Are All Part Of Platform 1. According to the PMI July 2020 Investor Report, Platform 1 products used in the smoke bomb HEETS ranked among the top 15 brands in the world in 2019, with a global market share of 2.2%, the company’s internal brand sales ranked third, second only to cigarette brands Marlboro and L.M.
Platform 2 products for carbon-heated tobacco products (CHTP), the same is to control the temperature range of tobacco heating, but Platform 2 does not rely on electronic equipment to operate and control the temperature of tobacco, but requires users to use matches or lighters to ignite cutting-edge carbon heat source, heat can be transferred from the tip to tobacco, the use of the same way as traditional cigarettes. As with Platform 1, heat sources are physically isolated from tobacco so that the temperature of the tobacco does not exceedAt 350 degrees C, aerosols containing nicotine are produced, reducing on average 95% of the harmful and potentially harmful components of smoke compared to conventional cigarettes. Platform 2 uses the smoke bomb brand TEEPS. According to PMI’s 2019 Annual Report, Platform 2 products were piloted in the Dominican Republic in December 2017 on a small-scale urban pilot, with clinical and non-clinical evaluation plans still under way through 2019 and consumer testing expected to be completed by early 2021.
Platform 3 products are nicotine-containing e-cigarettes, nicotine salt as a source of nicotine, without the need for tobacco combustion or heating, using non-electronically controlled heating path as a heat source. Insert matching smoke bombs into the smoking gear, the powder containing nicotine salt is atomized and the user inhales the aerosol through breathing. Platform 3 products will be completed by the end of 2020 for consumer testing.
Platform 4 products are also e-cigarettes, e-cigarette liquid as a nicotine source, lithium battery as a power source and the use of electronic control MESH heater as a heat source. Traditional e-cigarettes use cotton cores to inhale nicotine-containing solutions, coil around the heating element for heating, the temperature of the heater may change significantly as the user sucks, and when the liquid level is low, the chemical properties of aerosols may change, containing more harmful chemicals. In response to the above problems, Femo International’s Platform 4 products have been developed and innovated, developing MESH heaters, thermal control systems and low liquid detection systems.
According to the PMI Science website, platform 4 products with mesh material to increase the surface area of heating, heating more uniform, while using thermal control technology, the temperature will be stable between 200-220 degrees C, reduce the correlation with suction intensity; Platform 4 products will be on trial in London in 2018, according to the company’s 2019 comprehensive report.
Management change for smoke-free future continuous relay
The vision of a smoke-free future cannot be separated from the customization and execution of strategic decisions made by the company’s management. According to The Official Website of Fimo International, Mr. Tan, who has been CEO of Fimo International since 2013, was recently appointed chairman of the company, effective May 1 this year, while the company appointed Yacek OrrJacek Olczak is the new chief executive. Mr. Orczak, 56, holds a master’s degree in economics from the University of Rhodes in Poland and has worked at Fimo International since 1993;
Mr. Orczak has been an important driver of Themo International’s smoke-free transformation. During his time as Chief Operating Officer, Fimo International increased its net income from smoke-free products to 28% in the first quarter of 2021. He also led the company’s business transformation and successfully transformed Femo International from a B2B company into a growing B2C company. In accepting the ceo’s appointment, Mr. Orczak promised to accelerate The transformation of Fimo International to a smoke-free company. He also said the company is committed to developing responsible commercial smoke-free products to replace cigarettes as soon as possible.
Mr Orczak’s new job announced the company’s new structure in the Americas, appointing Deepak Mishra, a former chief strategy officer, as president of the Americas, with responsibility for the US, Canada and Latin America, effective July 1. The new structure of the Americas will focus on three areas: strengthening Its Leadership in Latin America and Canada as Fimo International accelerates its move towards a smoke-free future, deepening cooperation with partners to commercialize low-risk products in the United States, and working with Fimo International’s Life Sciences Group to establish an important launch platform for Fimo International’s “Beyond Nicotine” strategy in the United States through expanded partnerships and commercial deployments.
Deepak Mishra is one of the company’s most important roles in the future. In less than three years at Fimo International, he has helped develop long-term strategies and implement them through strategic partnerships and investments. Deep expertise in mergers and acquisitions is essential for Fermo International’s “Beyond Nicotine” strategy. Prior to joining Fillmore International, Mr. Mishra worked at Procter and Gamble and AccentureMcKinsey Consulting and Private Equity Centerbridge Partners LP have held senior management positions.
Also from 1 July, the Strategy and Programme Executive Function of Fimo International (previously reported to Mr Mishra) will report to Emmanuel Babaau, Chief Financial Officer. Ankur Modi will be the Executive Head of Global Strategy and Programmes. On August 1, Reginaldo Dobrowolski will serve as Vice President and Chief Financial Officer, and Andreas Kurali will serve as Deputy Chief Financial Officer for Financial Transformation.
Headquarters change promotes profound change
On June 23rd It Was 23rd That Fillmore International Had MoveD Its HeadquarterS From New York To Connecticut. The new headquarters is expected to be operational by the summer of 2022. With its technical knowledge, forward thinking and openness to problem solving, Connecticut is the ideal location for a new U.S. headquarters that wants to realize its vision for a smoke-free future more quickly and is looking forward to integrating into the local community in a meaningful way, said Yacek Orczak.
In addition to replacing cigarettes with better alternatives, Fermo International is also looking to use its expertise in life and medical sciences to develop solutions in areas such as respiratory drug delivery and plant medicine.
The new headquarters will house members of the Americas team and other corporate functions, and its operations center will remain in Lausanne, Switzerland, to continue to support global operations. With the support of Connecticut Gov. Ned Lamont’s office, the move will create about 200 jobs in the state.
Other long-term growth opportunities
The move by Fermo International to relocate its U.S. headquarters comes at a time when long-term opportunities for the company are being considered, including heating tobacco, including nicotine bags and next-generation equipment. Management is also looking for adjacent points, such as the broader lifestyle/health market, as well as high-margin plant medicines (including pure CBD) and respiratory medications. The company hopes to achieve net income growth of at least $1 billion through non-nicotine efforts by 2025. Olczak believes That Fimo International has the ability to demonstrate its competitive advantage around product safety and effectiveness and the ability to validate/validate scientific claims.
To this end, more recently, Fimo International and TissUse Gong (a biotechnology company) signed a cooperation agreement to combine its InHALES technology with TissUse’s proprietary HUMANIC “multi-organ chip” (MOC) platform to develop a highly integrated and innovative human aerosol testing platform, HUMIMIC-InHALES, to simulate the entire human respiratory tract.
It is reported that Femo International’s InHALES technology specifically involves an aerosol exposure device, its size, structure and function is very similar to the human respiratory tract; The HUMIMIC-InHALES test platform developed by Femo International and TissUse using these two technical cooperation technologies will provide a high-precision simulated lung that, through acute and subchecketrainal tests, combined with observations of the response of the micro-human liver, can be used to assess the effects of inhaled aerosol components such as smoke particles, airborne pathogens and inhalable drugs on the human respiratory tract and the whole body.
Dr. Julia Hoeng, head of global exploration at Fimo International, said the partnership meets the company’s ambition to extend its capabilities in aerosol applications to exploratory research and development and to transform new approaches to science. Not only will this help the company advance research and development of tobacco products, he believes, but it will also support biomedical research outside its core business
Post time: Aug-24-2021