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Swedish Match to increase production capacity

13 Feb 2020. Swedish Match has said it will increase production capacity for its successful tobacco-free nicotine pouches, reports Reuters.

Last year, the tobacco group started distributing its non-tobacco pouch product ZYN across the US and now Swedish Match has decided to expand its US plant beyond its latest projection in order to support sales growth. This means that, from 2022, the factory will have the capacity to produce more than 200 million cans of pouches per year, according to Reuters.

The announcement comes after an unexpected fall in the group’s Q4 earnings. The operating profit amounted to SEK 1.1 billion (USD 114.2 million) compared to SEK 1.2 billion (USD 124.6 million) last year, however, profit and turnover did grow slightly more than expected.

According to Reuters, CEO Lars Dahlgren expects the nicotine pouch production capacity to remain “clearly strained” in 2020, which will result in Swedish Match having to hold back on the distribution rollout.

“We have decided that it’s more important not to risk a capacity crunch than to perhaps risk sit with some excess capacity for a while,” Dahlgren said.