SUBIC BAY FREEPORT -- Philip Morris Philippines International Manufacturing Inc. has formally started the construction of its Asia Pacific warehousing hub located in this Freeport after a simple ground breaking ceremony Monday morning.

Philip Morris signed a 50-year lease agreement with the free port authority, increasing its total land area to 49,279 square meters from its current 10,000-square-meter warehouse.

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When finished, the new warehouse will have humidity control, fire suppression equipment, and air conditioning to store imported tobacco which will then be transported to cigarette manufacturing plants in Malaysia, Indonesia, and the Philippines.

The expansion forms part of the company’s plan to build a P1-billion tobacco leaf regional warehouse here.

"What we are groundbreaking today is actually the Phase II of our investments here in Subic. You will recall that in January 2008, exactly two years ago, we opened the first phase which was a 10,000 warehouse that used to be building 8120 of SBMA located at the Boton area,” PMPMI Managing Diretor Chris Nelson said.

At present, the existing warehouse in Boton can only accommodate 6,100 metric tons of tabacco leaf.

The construction of the Subic Techno Park warehouse, with an initial capacity of storing 14,000 metric tons of tobacco, is expected to be completed July this year.

Nelson explained that Subic was chosen over several location in Southeast Asia for its reasonable advantage in cost and efficiency over the various storage areas where tobacco leaf are previously kept.

“We have steadily expanded our investments here in the Philippines. The project that we are going to ground break today further cements our commitment to the economic development of the country and our faith in the Philippine tobacco industry,” Nelson said.