PM USA puts several properties up for sale..

July 9, 2009 - Philip Morris (PM) USA has put some of its South Richmond and Chesterfield County properties up for sale as the tobacco company cuts costs and consolidates its operations in a smaller U.S. cigarette market. The Henrico County Virginia - based company is seeking to sell more than 570,000 square feet of office, laboratory, warehouse and manufacturing space just off Bells Road, on property adjacent to its cigarette plant off Interstate 95.

The property for sale includes 186 acres, about 86 acres of it developable land, according to a marketing brochure from the commercial real estate brokerage CB Richard Ellis, which is handling the sale. The company also wants to sell a 93,000 square foot building in Chesterfield's Airpark Business Center on Whitepine Road. That building formerly housed a Philip Morris USA product research subsidiary, Chrysalis Technologies.

The sale of the properties is part of a larger restructuring by Philip Morris USA's parent company, Altria Group Inc., which is adjusting its business operations as U.S. cigarette consumption slowly declines and after spinning off its international cigarette business as a separate company in 2008.

Altria is seeking to save more than $1 billion in costs by 2011. The company has spent billions adding tobacco products other than cigarettes to its business portfolio. This year, it acquired the nation's top smokeless-tobacco maker, UST Inc., and it is combining many of that company's administrative and sales functions with Altria's.

The sale of the Richmond-area properties "is about how Altria and its operating companies have continued to innovate and consolidate and restructure the company for the future," said David Sutton, a company spokesman. "What we have done is moved some employees around, and shifted some focus and put people in different places."

Sutton said he could not comment on the asking price for the properties. The city of Richmond assessed the operations building and 60-acre parcel it sits on at about $68 million this year.

The company's restructuring plan includes closing Philip Morris USA's only other cigarette plant, in Cabarrus County, N.C. and moving the production to the Richmond plant. The company said in April it would cease production at the North Carolina factory by the end of July and put the plant up for sale.

The property for sale in South Richmond includes what Philip Morris USA calls its operations center, a three-story building that opened in 1982 and once housed several hundred employees, mostly in administrative jobs. Sutton said most of the operations from the building have been moved to other company facilities in the Richmond area, such as Altria's headquarters building on West Broad Street in Henrico County, Philip Morris USA's Park 500 tobacco processing facility in Chesterfield County, and its Center for Research and Technology in downtown Richmond.

Altria reported earlier this year that it had about 5,460 employees in the Richmond area as of Jan. 1, but a company spokesman confirmed in February that the company was cutting jobs locally as part of its corporate restructuring. The company has not released a specific number of jobs that were eliminated.

Reference: Philip Morris puts several properties up for sale, Contact John Reid Blackwell, Richmond Times-Dispatch, 7/9/2009.