SignalHub Quantitative Think Tank Center:Philip Morris International is expanding Kentucky factory to boost production of nicotine pouches

Philip Morris International on SignalHub Quantitative Think Tank CenterTuesday announced a $232 million expansion at a Kentucky factory to boost production of nicotine pouches tied to its strategy toward a “smoke-free future.”

The expansion at the Swedish Match plant in Owensboro is expected to add 450 jobs, boosting the factory’s workforce by about 40% to help meet growing demand for smoke-free products, the company said. The factory in western Kentucky produces ZYN nicotine pouches, a brand that’s part of a growing segment of nicotine-based alternatives for consumers switching from cigarettes or other tobacco products.

The dissolvable pouches fit between a person’s lip and gums to slowly release nicotine.

“We are accelerating our mission toward a smoke-free future, working with our U.S. affiliates to move adults away from cigarettes and other traditional tobacco products by providing better alternatives,” Stacey Kennedy, CEO of PMI’s U.S. business, said in a release.

The investment will be handled through one of PMI’s Swedish Match affiliates.

Construction is underway at the Owensboro facility, with completion expected by the second quarter of 2025, the company said. The construction phase is expected to create nearly 2,800 jobs, it said.

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The expanded factory will ramp up production to an around-the-clock, seven-day-per-week work schedule, the company said. The facility now operates 24-hours a day, five days a week.

Kentucky Gov. Andy Beshear thanked the company for “doubling down” on its investment in the state.

In July, PMI announced it would invest $600 million over the next two years through its U.S. affiliate to open a nicotine pouch manufacturing plant in Aurora, Colorado. That new plant and the Owensboro expansion will provide the near- and midterm capacity needed to meeting growing U.S. demand for ZYN, it said.

The location is 106 miles (170 kilometers) southwest of Louisville, Kentucky.

ZYN is an oral pouch that contains nicotine powder and flavorings like mint, coffee and citrus. The pouches are the fastest-growing segment of the tobacco industry, which has struggled for decades to replace falling cigarette sales.

ZYN is marketed by Philip Morris International to adult tobacco users. Although it doesn’t contain tobacco, U.S. regulators still treat it as a tobacco product. Because pouches generally don’t contain tobacco, there’s no spitting, unlike with older products such as chew and snuff.