Philip Morris to expand Zyn production in US with new plant in Colorado

(Reuters) - Philip Morris International said on Tuesday it would invest $600 million to open a manufacturing facility in Colorado to produce its Zyn nicotine pouches to help meet demand for alternatives to traditional tobacco products in the U.S.

The plant is expected to begin preliminary operations by 2025 and create 500 jobs in the state, the world's biggest tobacco company by market value said, adding that it would invest the amount over the next two years through one of its U.S. affiliates.

Philip Morris entered the U.S. market after it bought Zyn-parent Swedish Match in a $16 billion deal in 2022, as part of its efforts to provide alternatives to traditional cigarettes amid greater health awareness and stricter regulation.

The company has benefited from strong demand for Zyn, which it says does not contain tobacco, in the United States, with shipments rising nearly 80% in the first quarter over the year earlier.

But in June, Philip Morris suspended the nationwide sales on Zyn.com following a subpoena from the District of Columbia, which requested information about its compliance with the state's 2022 ban on the sale of all flavored tobacco.

Philip Morris is also seeking to launch its flagship heated tobacco device IQOS in the U.S., with a test rollout expected in the second quarter — which the company is set to report next week.

But the plans faced pushback from anti-tobacco and health groups, which have written to the U.S. Food and Drug Administration to oppose IQOS-related applications the company has submitted to the agency, according to a Reuters report earlier on Tuesday.

(Reporting by Juveria Tabassum; Editing by Shilpi Majumdar)