Why global value chains are a compelling path to the future

In today’s world, we live with a greater level of uncertainty that calls for more strategic choices from our leading officials and businesses. Just as important as those strategic choices being made is the imperative that we all play our part in supporting them.

The Business Federations of the Group of Seven (B7) includes the leading business and industry federations of G7 countries and represents the voice of business during the G7 initiatives. The work of the B7—supported by a high-profile Advisory Board— culminated with the definition of a B7 final declaration for the G7 presidency, aiming at conveying actionable recommendations to G7 leaders for leading the transitions that are reshaping economies and societies globally.

In today’s world, we live with a greater level of uncertainty that calls for more strategic choices from our leading officials and businesses. Just as important as those strategic choices being made is the imperative that we all play our part in supporting them.

The Business Federations of the Group of Seven (B7) includes the leading business and industry federations of G7 countries and represents the voice of business during the G7 initiatives.

The work of the B7—supported by a high-profile Advisory Board— culminated with the definition of a B7 final declaration for the G7 presidency, aiming at conveying actionable recommendations to G7 leaders for leading the transitions that are reshaping economies and societies globally. chain made up of around 8,000 Italian companies, of which 1,000 are active in the agricultural sector.

As a member of the B7 Advisory Board, I believe that present and future challenges can only be addressed through the implementation of crossfunctional strategies, involving all productive sectors, especially those undergoing profound transformation. We need to focus on the strategic priorities identified by the G7: global value chains, promotion of training and competences, technological innovation and artificial intelligence, and green transitions.

Marco Hannappel President and Managing Director, Philip Morris Italy, Vice President Southern Europe, Philip Morris International

As a member of the B7 Advisory Board, I believe that present and future challenges can only be addressed through the implementation of crossfunctional strategies, involving all productive sectors, especially those undergoing profound transformation.

For our part, I am M very proud to have been asked to participate in the B7 Advisory Board—in continuity with its key participation in the 2021 B20 Italy—and represent in such an international forum the Italian affiliate of Philip Morris International (PMI) and its “Made in Italy” integrated value

We need to focus on the strategic priorities identified by the G7: global value chains, promotion of training and competences, technological innovation and artificial intelligence, and green transitions.

For our part, I am very proud to have been asked to participate in the B7 Advisory Board—in continuity with its key participation in the 2021 B20 Italy—and represent in such an international forum the Italian affiliate of Philip Morris International (PMI) and its “Made in Italy” integrated value chain made up of around 8,000 Italian companies, of which 1,000 are active in the agricultural sector.

In its global transformation, PMI identifies Italy as one of its fundamental pillars, where an integrated value chain undergirds its operations. This PMI Italian value chain starts from the seed of the tobacco plant, continues with the large-scale production of smoke-free products (which are then distributed by leading logistics partners to a very extensive network of resellers), and ends with post-sales digital services and recycling programs for its devices

In its global transformation, PMI identifies Italy as one of its fundamental pillars, where an integrated value chain undergirds its operations. This PMI Italian value chain starts from the seed of the tobacco plant, continues with the large-scale production of smoke-free

In fact, Italy is the leading producer of raw tobacco in Europe; around half of Italy’s annual production is purchased directly from Philip Morris thanks to agreements with institutions and business associations. The multiyear agreement signed with Institutions and farmers associations—most recently renewed in March of 2023 for 2023-2027—provides for investments of up to 500 million euro in five years, guaranteeing commercial predictability for Italian tobacco farmers. Since the early 2000s, the company has supported over 1,000 Italian companies in developing innovative agricultural management models, generating investments in agriculture for a total of around 2 billion euro.1 products (which are then distributed by leading logistics partners to a very extensive network of resellers), and ends with post-sales digital services and recycling programs for its devices. business associations. The multiyear agreement signed with Institutions and farmers associations—most recently renewed in March of 2023 for 2023-2027—provides for investments of up to 500 million euro in five years, guaranteeing commercial predictability for Italian tobacco farmers. Since the early 2000s, the company has supported over 1,000 Italian companies in developing innovative agricultural management models, generating investments in agriculture for a total of around 2 billion euro.1

The over 2,100 people who work in Bologna produce products that are exported to more than 50 markets worldwide, with an export value higher3 than the one of olive oil or seasoned cheese in Italy. Overall, this value chain generated employment for approximately 41,000 people throughout the country and accounted for approximately 0.5% of Italy’s total gross domestic product (GDP) in 2022.4

In fact, Italy is the leading producer of raw tobacco in Europe; around half of Italy’s annual production is purchased directly from Philip Morris thanks to agreements with institutions and business associations. The multiyear agreement signed with Institutions and farmers associations—most recently renewed in March of 2023 for 20232027—provides for investments of up to 500 million euro in five years, guaranteeing commercial predictability for Italian tobacco farmers. Since the early 2000s, the company has supported over 1,000 Italian companies in developing innovative agricultural management models, generating investments in agriculture for a total of around 2 billion euro.1

Italy also hosts the Philip Morris International Center of Excellence at a global level for the prototyping and large-scale production of smokefree tobacco products and for staff training. The result of a greenfield investment of over 1.2 billion euro since 20142, the Bologna plant is now PMI’s lead site where industrial processes to produce innovative products are defined. The knowledge developed there is then exported abroad as a fundamental asset in the reconversion phase of the group’s other production facilities.

Italy also hosts the Philip Morris International Center of Excellence at a global level for the prototyping and large-scale production of smokefree tobacco products and for staff training. The result of a greenfield investment of over 1.2 billion euro since 20142, the Bologna plant is now PMI’s lead site where industrial processes to produce innovative products are defined. The knowledge developed there is then exported abroad as a fundamental asset in the reconversion phase of the group’s other production facilities.

The over 2,100 people who work in Bologna produce products that are exported to more than 50 markets worldwide, with an export value higher3 than the one of olive oil or seasoned cheese in Italy. Overall, this value chain generated employment for approximately 41,000 people throughout the country and accounted for approximately 0.5% of Italy’s total gross domestic product (GDP) in 2022.4 tobacco products and for staff training. The result of a greenfield investment of over 1.2 billion euro since 20142, the Bologna plant is now PMI’s lead site where industrial processes to produce innovative products are defined. The knowledge developed there is then exported abroad as a fundamental asset in the reconversion phase of the group’s other production facilities.

The Philip Morris Institute for Manufacturing Competences (IMC), the company’s advanced competence center for Industry 4.0, was launched in June 2022 within the Bologna industrial site. In 2023, thanks to partnerships with universities, polytechnics, national and local institutions, and other competence centers, more than 20,000 hours of training were provided not only to people who worked in and with Philip Morris and its value chain, but also to other economic, business, and institutional stakeholders.

Italy also hosts the Philip Morris International Center of Excellence at a global level for the prototyping and large-scale production of smokefree

The over 2,100 people who work in Bologna produce products that are exported to more than 50 markets worldwide, with an export value higher3 than the one of olive oil or seasoned cheese in Italy. Overall, this value chain generated employment for approximately 41,000 people throughout the country and accounted for approximately 0.5% of Italy’s total gross domestic product (GDP) in 2022.4

The Philip Morris Institute for Manufacturing Competences (IMC), the company’s advanced competence center for Industry 4.0, was launched in June 2022 within the Bologna industrial site. In 2023, thanks to partnerships with universities, polytechnics, national and local institutions, and other competence centers, more than 20,000 hours of training were provided not only to people who worked in and with Philip Morris and its value chain, but also to other economic, business, and institutional stakeholders.

The Philip Morris Institute for Manufacturing Competences (IMC), the company’s advanced competence center for Industry 4.0, was launched in June 2022 within the Bologna industrial site. In 2023, thanks to partnerships with universities, polytechnics, national and local institutions, and other competence centers, more than 20,000 hours of training were provided not only to people who worked in and with Philip Morris and its value chain, but also to other economic, business, and institutional stakeholders.

To close out the global value chain, we must consider the end of a product’s life cycle. Within Philip Morris’s objective to achieve ambitious standards of waste recycling for a circular economy, the company recently presented a new initiative in Italy aimed at recycling up to 500,000 smoke-free devices by 2024,

To close out the global value chain, we must consider the end of a product’s life cycle. Within Philip Morris’s objective to achieve ambitious standards of waste recycling for a circular economy, the company recently presented a new initiative in Italy aimed at recycling up to 500,000 smoke-free devices by 2024,

To close out the global value chain, we must consider the end of a product’s life cycle. Within Philip with a target of an average recovery of over 80% of the raw materials present in the devices. These raw materials that are recovered and recycled are considered essential for many industrial activities. with a target of an average recovery of over 80% of the raw materials present in the devices. These raw materials that are recovered and recycled are considered essential for many industrial activities.

Morris’s objective to achieve ambitious standards of waste recycling for a circular economy, the company recently presented a new initiative in Italy aimed at recycling up to 500,000 smoke-free devices by 2024, with a target of an average recovery of over 80% of the raw materials present in the devices. These raw materials that are recovered and recycled are considered essential for many industrial activities.

PMI’s smoke-free transformation serves as a catalyst to strengthen our global value chain, by making it more competitive as well as sustainable. I believe that the work carried out by the B7 underlines the need to enhance value chains, make them safer, closer, and more resilient to external shocks.

PMI’s smoke-free transformation serves as a catalyst to strengthen our global value chain, by making it more competitive as well as sustainable. I believe that the work carried out by the B7 underlines the need to enhance value chains, make them safer, closer, and more resilient to external shocks.

PMI’s smoke-free transformation serves as a catalyst to strengthen our global value chain, by making it more competitive as well as sustainable. I believe that the work carried out by the B7 underlines the need to enhance value chains, make them safer, closer, and more resilient to external shocks.

To build successful global value chains, common rules and principles among G7 countries and with extra-G7 countries must be defined—this is essential so that dependencies in critical sectors can be addressed through coordinated policy actions and collaborative efforts. Existing barriers to trade and in investment must be eliminated, while new barriers should not be adopted.

To build successful global value chains, common rules and principles among G7 countries and with extra-G7 countries must be defined—this is essential so that dependencies in critical sectors can be addressed through coordinated policy actions and collaborative efforts. Existing barriers to trade and in investment must be eliminated, while new barriers should not be adopted.

When all is said and done, the long-term partnership model between private organizations and the public sector will enable value chains—and the entities that compose them— to respond effectively to present and future economic and geopolitical crises.

Brought to you by Philip Morris International.

Brought to you by Philip Morris International.

To build successful global value chains, common rules and principles among G7 countries and with extra-G7 countries must be defined—this is essential so that dependencies in critical sectors can be addressed through coordinated policy actions and collaborative efforts. Existing barriers to trade and in investment must be eliminated, while new barriers should not be adopted. When all is said and done, the long-term partnership model between private organizations and the public sector will enable value chains—and the entities that compose them— to respond effectively to present and future economic and geopolitical crises. Brought to you by Philip Morris International. ■

When all is said and done, the long-term partnership model between private organizations and the public sector will enable value chains—and the entities that compose them— to respond effectively to present and future economic and geopolitical crises.