Ukraine’s cigarette market shows no growth potential and remains stable, said Philip Morris Ukraine CEO Maksym Barabash, adding that the company is now focusing on exports. “As before the war, the potential lies in exports. We’ll look at which countries this can be done to,” he noted.
Before Russia’s full-scale invasion, the company’s Kharkiv plant produced 20 billion cigarettes annually, with half exported — mainly to Japan. Barabash acknowledged that restoring exports to Japan will be challenging, but emphasized plans to begin with geographically closer markets.
Following the closure of its Kharkiv facility, Philip Morris invested $30 million into a new factory in Lviv Oblast, launched in May 2024. The facility now operates at full capacity with five production lines and an annual capacity of 10 billion cigarettes. An additional UAH 60 million ($1.45 million) was spent on constructing a bomb shelter on-site for 170 people.
According to YouControl data, Philip Morris Ukraine boosted its revenue by 86.7% in 2024 to UAH 21.62 billion ($524.6 million). The company also managed to cut net losses by 30.1%, down to UAH 1.2 billion ($29.09 million).
Meanwhile, Ukraine’s black market for tobacco continues to shrink. A Kantar Ukraine study shows illegal trade dropped to 12.6% in October 2024, down from 19.1% at the start of the year.