When technology & innovation meet sustainability
Becoming carbon-neutral
For the factory in Neuchâtel, the aim is to already reach carbon neutrality by the end of 2020. To this end, several measures have been put in place in recent years, including the installation of a wind turbine, solar panels, and parking spaces with charging stations for electric cars.
The biggest contribution comes from taking advantage of the factory’s lakeside location: The production facilities began using water from the lake at 6 degrees Celsius to cool machinery and buildings as early as 1964. Currently, the water is released back into the lake at 11 degrees Celsius, following the cooling process.
Going forward, the same water will also be used for heating via two newly installed 600-kilowatt heat pumps. After use, the water temperature will be lowered again to 6 degrees Celsius before being released back into the lake. This will represent a reduction of approximately 1,000 tons of CO2 per year. The heat pumps will be in operation in the second half of 2020.
"In the factory in Neuchâtel, the aim is to already reach carbon neutrality by the end of 2020."
In collaboration with Swiss nonprofit certifier myclimate, PMI managed to make its global Operations Center in Lausanne carbon-neutral for the second year in 2019. The team responsible for PMI’s Swiss buildings calculates the carbon footprint of the OC and assesses ways to reduce CO2 emissions as much as possible. Any unavoidable emission is offset through myclimate.
The biggest impact so far has been achieved through the installation of a heat pump and using water from Lake Geneva to fully heat and cool the building. Compared with the previously used boilers, the heat pump saves 10,000 liters of water and 40,000 cubic meters of gas annually.
Promoting sustainability through innovation & technology
New technologies are emerging rapidly, including in robotics, artificial intelligence, and virtual reality. Consumer-goods companies have been at the forefront of digital innovation in marketing and sales. Automation and digital solutions are also widely implemented in manufacturing and supply chain, but they bring risks related to employment patterns, data privacy, and human rights.
Taking a positive and proactive approach to shaping the future of work will enable companies to respond to people’s desire for income security, well-being, empowerment, and purpose, where people’s lives are enriched by advancing technology, and where society can prosper from equal access to new opportunities.
"We started using drones in tobacco-growing areas to monitor crop quality and reduce the need for pesticides."
Breakthrough developments in science and technology, including from outside our industry, such as battery technology, enabled us to develop the innovative smoke-free products that we commercialize today. We continue to actively explore and responsibly deploy opportunities brought by new technologies for application in our business.
For instance, we started using drones in tobacco-growing areas to monitor crop quality and reduce the need for pesticides. Another example relates to our fleet, where we increasingly rely on telematics to help minimize road traffic accidents.
As member of WBCSD, we are part of the “Future of Work” working group, crafting a future with workforces that are secure, motivated, skilled, and prepared for challenges posed by technological change.
Reducing waste with digitalization
Another measure currently being put in place to reduce PMI’s environmental footprint in Switzerland aims to substantially reduce operational waste. On the Neuchâtel campus, all biogenic waste – for example, cardboard, paper, and tobacco – will be heat-treated to produce energy.
The goal of this process called pyrolysis is to substitute fossil energies used on-site to produce steam and hot water, and to create a cycle whereby the waste that’s produced despite reduction efforts is recycled and reused. The waste will first be mechanically crushed and shredded, then heated in a reactor. This will produce a gas that can replace the natural gas used in the boiler. We expect this process to be fully operational by the end of 2020.
Like most other fast-moving consumer goods companies, PMI is digitalizing and automating its end-to-end operations. Being able to react quickly to shifting consumer demands while using resources responsibly is a critical factor for success. Printed materials such as folding cartons have had one of the longest lead times in the supply chain, as it can take up to 12 weeks using traditional technologies to get them produced and delivered to the factories.
"Innovative digital printing have resulted in considerable waste reduction."
As PMI changes its packs frequently, also as a result of changing packaging regulations, it has been difficult to respond in a timely fashion to market volatilities and changing consumer demand. Digital printing solutions can drastically reduce the lead time required. However, no economically viable option for PMI’s mass volumes and quality requirements was available. Consequently, PMI’s Innovation Development Center in Neuchâtel spent several years developing a hybrid digital printing and converting solution for folding cartons in-house.
Since 2019, this pioneering approach has enabled PMI to print on demand. This has not only allowed the company to achieve its objectives of speed, flexibility, high finishing quality, and efficiency, but also has resulted in considerable waste reduction. There is no waste due to minimum order quantities as only the actual demand is printed. This allows the company to avoid printing theequivalent of 1,800 tons of paper per year. Furthermore, printing digitally has the potential to eliminate up to 3,000 printing cylinders made out of copper, steel, and chrome from PMI’s supply chain.
Investing in novel technologies
With our main research facility in Neuchâtel, PMI is contributing significantly to the innovation landscape in Switzerland. In 2019, the European Patent Office (EPO) announced that PMI was their thirdlargest Swiss applicant with 424 patent applications, ranking 45th out of all patent applicants worldwide. The heating technology and other components for our tobacco heating system were developed and assessed in Neuchâtel, with the contribution of around 60 startups and SMEs from across Switzerland.
PMI actively invests in technologies and businesses that support its vision of a smoke-free future through Lausanne-based PM Equity Partner (PMEP), the corporate venture capital fund of PMI. In 2019, PMEP partnered with MassChallenge Switzerland, a nonprofit accelerator that helps startups in Switzerland and elsewhere in Europe grow their businesses, to create the second edition of the PMEP start-up challenge.
During this event, 10 start-ups were invited to PMI’s Operations Center to pitch their business ideas on innovative solutions in the fields of digital, life sciences, and operations to a jury composed of members of PMI’s Company Management. In addition to increasing PMI’s presence within the Swiss innovation ecosystem and introducing a crowd of promising entrepreneurs to the company’s vision of a smoke-free future, the competition led to several R&D collaborations with the participating start-ups.
"PM Equity Partner is financially supporting several innovative start-ups."
Beyond hosting challenges and competitions, PMEP is financially supporting several other innovative start-ups. It invested, for example, in TreaTech, a start-up emanating from the École Polytechnique Fédérale de Lausanne.
TreaTech has developed a novel wastewater treatment that combines freshwater production with the opportunity to transform organic matter into biogas, valorize important minerals, and eradicate micropollutants. This investment contributes to PMI’s commitment to clean and sustainable technologies.
