[Report] Starting Point of a 'Smoke-Free Future'... Philip Morris East Asia Outpost

Philip Morris' Non-Combustible Tobacco Manufacturing Facility in East Asia
Annual Production Capacity of Up to 40 Billion Sticks
Producing Terea, Sentia, and More... Exported to 12 Countries Including Japan

"It will be easier to understand if you think of it as similar to making paper in a paper mill."

The Korea Philip Morris plant in Yangsan, Gyeongnam, which we visited on the 8th, was a space that visualized the word 'Gwollyeon (卷煙).' Gwollyeon, a term combining 'gwon (卷),' meaning to roll, and 'yeon (煙),' meaning smoke, is a word rarely used in everyday life that refers to cigarettes made by rolling tobacco leaves with paper or similar materials. Contrary to the expectation that the name Gwollyeon simply comes from the form of the finished product, the actual manufacturing process incorporates various rolling processes throughout, including the rolling of tobacco leaves and the processing stages of raw materials.

The 'double stick' condition during the Centia Stick Combiner process. Products in the double stick condition are cut in half and then moved to the packing equipment called the packer.
[Photo by Korea Philip Morris]

Yangsan Plant, Philip Morris' Only Non-Combustible Product Production Base in East Asia

The Yangsan plant is Philip Morris International (PMI)'s only non-combustible product production base in East Asia and plays a key role in realizing the vision of a "smoke-free future." It produces 18 types of 'Terea' and 4 types of 'Sentia,' tobacco sticks exclusively for the IQOS Iluma series of heated tobacco products, as well as conventional combustible cigarettes such as 'Marlboro' and 'Parliament.' Established in 2002, the Yangsan plant has invested over $480 million to date, continuously expanding facilities and advancing technology. Covering approximately 70,000 square meters, it boasts logistical advantages due to its proximity to ports, highways, and airports.

The Yangsan plant operates based on a high level of automation and a strict process management system. Although about 600 employees currently work there, the direct manufacturing processes are carried out by automated equipment such as robots, with most workers engaged in inspection and management tasks. Chang Yongjun, General Manager of Production at the Yangsan plant, proudly stated, "Through precise automated production processes and rigorous quality inspections at every stage, we ensure that all products maintain uniform, top-quality standards."

Inspecting the quality of pack barcodes and data codes in the Centia packer process.
[Photo by Korea Philip Morris]

The manufacturing process of non-combustible products is broadly divided into primary and secondary processes. The primary process involves mixing and processing raw materials. In this stage, tobacco leaves and stems are initially processed to produce 'Cast Leaf,' a type of tobacco sheet that serves as the core raw material for non-combustible products. Upon entering the factory area where the equipment is located, the first thing that hit the senses was the smell. The scent of tobacco leaves, reminiscent of opening a fresh pack of cigarettes, filled the space so strongly that one could tell it was a tobacco factory even with eyes closed.

The process begins with opening boxes containing rectangular bales of tobacco leaves weighing 200 kg each. The tobacco bales are moved to a shredder, which finely tears them apart like a paper shredder, then transferred to a grinder where the leaves and stems are mixed and coarsely ground. Next, in the initial processing line (CGL), the tobacco leaves and stems are mixed according to the blending ratio, kneaded, and then rolled out thinly into sheets, completing the cast leaf. These sheets are wound onto cylinders called bobbins to create roll-form semi-finished products known as 'cast leaf bobbins,' marking the end of the primary process.

The 'Sentia' packaging materials waiting before entering the Packer equipment.
[Photo by Korea Philip Morris]

The secondary process completes the semi-finished cast leaf into the final product. The transition to this process was again noticeable by smell; upon entering, the strong scent of menthol was invigorating. Here, a crimper machine folds the cast leaf into rod shapes to manufacture tobacco plugs, which are the rod-shaped tobacco parts of the cigarette sticks excluding the filter, essential components of Terea and Sentia. The tobacco plugs produced by the crimper are then assembled with filters in a combiner to form the final cigarette sticks.

During the secondary process, quality standards are checked in real-time at every stage, and any products failing to meet standards are immediately removed from the production line. The finished sticks undergo sampling inspections every minute. The individual cigarettes are then moved to the packer, where 20 sticks are packed into one pack, 10 packs into one carton, and 50 cartons into one box for shipment.

"Terea and Sentia Dual Stick Strategy... Increasing Domestic Market Share"

The appearance of Boru units packed in the Centia packer equipment process.
[Photo by Korea Philip Morris]

The Yangsan plant currently has an annual production capacity of 40 billion sticks, with about one-third of last year's production exported to 12 countries including Japan. Chang stated, "The Yangsan plant serves as a production hub for the Asia-Pacific region, producing both domestic and export products based on excellent production efficiency and outstanding technological capabilities," expressing pride in its role.

The production processes at the Yangsan plant meet global process standards, including ISO quality management system certification (ISO-9001), environmental management system certification (ISO-14001), and occupational health and safety management system certification (ISO-45001). Chang explained, "At Yangsan, a dedicated quality control department continuously conducts various experiments and tests to ensure that only products passing internationally recognized strict standards are supplied to consumers."

Panoramic view of Korea Philip Morris Yangsan Factory. [Photo by Korea Philip Morris]

Korea Philip Morris plans to leverage the Yangsan plant's production and quality management capabilities as a forward base for non-combustible product manufacturing and to further strengthen its influence in the domestic heated tobacco market. Earlier this year, the company unveiled the new heated tobacco device 'IQOS Iluma i' series in February and expanded the sales channels for the exclusive stick Sentia nationwide this month.

Korea Philip Morris aims to increase market share through a dual stick brand strategy combining the existing Terea and the new Sentia. Sentia is designed for adult smokers who are new to IQOS. Compared to the existing Terea products, Sentia features a more intuitive taste, and the company expects it to help adult smokers transition to non-combustible products comfortably based on the familiar taste of traditional tobacco.

Chang said, "The Yangsan plant will continue to promote the transition of domestic adult smokers to non-combustible products through ongoing quality innovation and trust, and will maintain its role as a key production base realizing Philip Morris' vision of a smoke-free future."