He has been with PMI for 23 years, and now, Ali N. Karaman is Philip Morris’s newly appointed Managing Director for Egypt & Levant. In an exclusive interview with Executive, Karaman takes us through PMI’s plans for the next coming years in fulfilling a smoke-free transformation, the value in Lebanon’s market, and PMI’s new vision in today’s fast changing world.
Prior to his appointment as MD of Philip Morris Egypt & Levant, Karaman served as the Director of Smoke Free Products for the Middle East cluster, where he led the commercialization of Smoke Free Products in many Middle East markets while establishing deep industry knowledge and strong commercial expertise across various complex markets.
- Can you discuss the transformation taking place at PMI and the company’s new vision?
PMI’s global business transformation is about delivering on our vision to create a smoke-free future. To make our vision a reality, we are transforming and staking our entire future on scientifically substantiated smoke-free products that are a much better alternative for all adult smokers who would otherwise continue smoking. Getting away from cigarettes would be the most significant, positive disruption for the estimated 1.1 billion adult smokers worldwide—and we have the means to achieve this in the not-too-distant future.
- Why is the Lebanon considered an important investment market for Philip Morris?
Despite the endured multiple crises including economic, financial, political and security crises, Lebanon remains a dynamic country. I’m impressed by the resilience of the Lebanese people and their ability to remain forward looking and progressive despite the many challenges they have faced.
PMI has always been present in Lebanon, even during the turmoil of the civil war. In 2018, we took our partnership with the Regie to the next level when we started Marlboro medium production locally at the Regie’s facilities. We invested in new lines that are still operational and remain committed to Lebanon and further development of our business relationship with the Regie.
- Why is it so important for Philip Morris to develop smoke-free products, especially in a country like Lebanon with high smoking rates?
Since 2008, we have invested more than USD 9 billion to develop, scientifically substantiate, and commercialize smoke-free products for adults who would otherwise continue to smoke, with the goal of completely ending the sale of cigarettes, as smoking is the cause of serious diseases, and the best way to avoid the harms of smoking is never to start or, for those who smoke, to quit. That is why PMI is now actively working to expand its purpose and evolve into a broader lifestyle, consumer wellness and healthcare company, extending its value proposition and innovative capability to commercialize products that go beyond tobacco and nicotine.
In Lebanon, there are more than 1.4 million smokers, and has one of the highest smoking incidences in the region. Therefore, Lebanon is an important market for our smoke-free vision. The latter, combined with the dynamic and progressive nature of the Lebanese people, it was imperative to introduce our smoke-free vision in Lebanon. We have launched IQOS back in February 2020, just one year later we have launched Lil, a more affordable and accessible device. We have increased our offering to the Lebanese consumer and are constantly looking for ways to help Lebanese smokers switch to better alternatives.
- Can you explain, in your own words, why heated tobacco products cause less harm that traditional cigarettes which require burning?
The available information about heated tobacco is not a matter of theory or speculation. It is substantiated scientifically and through tests and practical use. Heated Tobacco products emit on average 90% lower levels of harmful chemicals compared to cigarette smoke, but that does not mean 90% reduction in risks as Heated Tobacco products are not risk free. In heated tobacco products, the tobacco is heated at a controlled temperature without burning it, in order to release a nicotine containing aerosol. In the aerosol of a heated tobacco product, water and glycerin form approximately 90% of the aerosol mass, there are no solid particles, and the levels of toxicants are reduced on average by 90% compared to cigarette smoke.
- What can you share about PMI’s long-term goals 5-10 years down the line in the region?
In 2015, our CEO Andre Calantzanpoulos made a bold statement announcing the ambition of the company to replace cigarettes with smoke-free products. Since then, Millions of adult smokers have already switched to our smoke-free products and given up cigarettes completely—and this is just the beginning. One of our key strategic priorities is to develop, assess, and commercialize a portfolio of innovative tobacco and other nicotine-containing products. We draw on the expertise of a team of world-class scientists from a broad spectrum of disciplines to help us reach our goal of replacing cigarettes with less harmful alternatives. Replacing cigarettes with less harmful alternatives is at the core of our business strategy and sits atop our sustainability priorities.
In our region, there is a high smoking prevalence with little awareness on the available alternatives to smoking. However, I strongly believe a smoke-free future is attainable, and the benefits it can bring to the people who would otherwise continue to smoke, and hence to public health, are enormous. However, the company cannot succeed alone. Together with governments and civil society, we can maximize this opportunity by achieving a consensus that smoke-free alternatives, when subject to proper government oversight and regulation, are part of a sound tobacco policy.
- How do PMI’s Environment, Social, and Governance (ESG) goals come into play in Egypt and the Levant?
To meet environmental, social and governance (ESG) issues it is necessary to employ adequate governance practices. PMI’s plans seek to take into consideration sustainability and social impact strategies, which are very important, especially in Egypt and the Levant. Our company principles of turning words, intentions and commitments into action are going to be translated into cooperation with organizations and institutions to achieve a positive impact and try to make a difference with regard to many aspects of ESG issues.
- Why do you think it is critical to be launching a new vision characterized by EPPIC disruption in today’s world?
In today’s fast-changing world, you can always choose to do nothing. Instead, we’ve set a new course for the company—we have chosen to do something really big. We’re creating a PMI that will be remembered for replacing cigarettes with a portfolio of revolutionary products. This the EPPIC disruption in our opinion as it is characterized by five main criteria, which is being Efficient, Purposeful, Pro-social, Inclusive, and Constructive.
PMI’s new vision reflects the company commitment to society, which expects us to act responsibly. We are doing just that, by delivering a smoke-free future. Our vision is critical as millions of adult smokers are looking for less harmful, yet satisfying, alternatives to smoking. Our mission is to give that choice while keep warning them about the risks that could be associated with any of our products.
- What do you anticipate will be the biggest challenge in your new role as the Managing Director for Egypt & Levant?
The region has been very welcoming to me so far. I also consider myself lucky to be working alongside a very motivated and exceptional team in Lebanon. Throughout the years, this team has been able to achieve a lot of successes and drive the business forward. Our people are our main asset that will help us to deliver exceptional results and maintain our successful relations with our stakeholders, business partners, consumers and regulators.
I believe a big management challenge in any place is to have a clear vision and strategy. Fortunately, this is exactly the advantage of working with PMI. The company vision and strategy are obvious, and my role as Managing Director is to communicate them to consumers in the region I work in. The challenge is to make the smokers see and feel the benefits of our policy of smoke-free products, to convince them of switching to “less-harmful” products or to quit smoking completely.
This article was provided by Philip Morris Lebanon.