Philip Morris' Global Race

Freed from Altria, Philip Morris International CEO Louis Camilleri is pushing hard to boost global sales before U.S.-style tobacco restrictions spread

By Nanette Byrnes and Frederik Balfour

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Louis C. Camilleri rarely shows his joy. But stepping into the role of CEO of the newly formed Philip Morris International (PM) (PMI) last March put him in a mood to celebrate. Gone from his life were the 129 active lawsuits of the U.S. business, which would remain under the banner of Altria Group (MO), where he had been CEO for six years. Instead of worrying about the slow death of the U.S. tobacco industry—spiraling taxes, smoking bans, and antismoking ads featuring body bags and black lungs—he could focus on new places to sell cigarettes from a sleek new operating base overlooking Switzerland's Lake Geneva and the Alps of Savoie. "This is the job I always wanted," Camilleri, 54, told staff. "I just had to break up the company to get it."

Unbound from Altria, Camilleri has poured his energies into ramping up sales in overseas markets where smoking is still a growth industry and a tobacco exec isn't viewed as a social pariah. Over the past year he has launched seven new variations on Marlboro alone, including Marlboro Black Menthol in Japan and a super-slim variant in Russia and Eastern Europe. He inked a deal with Stockholm-based Swedish Match to market smokeless tobacco worldwide. His biggest coup: the August launch of Marlboro in China, home to a third of the world's 1 billion smokers, through a joint venture with China National Tobacco. That helped sales jump 13% in 2008, to $26 billion, while profits rose 14%, to $7 billion, despite a worldwide recession. "If these guys were in any other industry," notes analyst Christian Eddleman of Argus Research, "theirs would be pointed to as the way to execute a long-term strategy."

But the forces that dogged Camilleri in the U.S. increasingly threaten to cramp his freedom overseas. On the first anniversary of the Marlboro maker's split, Camilleri faces a complicated landscape, with rising anti-tobacco pressures and a familiar set of adversaries. He's racing to sell more cigarettes in more countries around the world. Just as Altria was spinning off PMI to get away from U.S. liabilities and other issues, billionaires Michael Bloomberg and Bill Gates pledged $500 million to fund antismoking campaigns in emerging markets. Meanwhile, governments in developing nations are gradually coming around to the view that tobacco use should be discouraged through smoking bans, tax hikes, and marketing restrictions. In a world connected by the Internet, Camilleri knows he can't escape being cast in a harsh light for selling what he concedes is "a very harmful product," one the World Health Organization says will kill 5.4 million people this year.

Such restrictions arguably make it more critical for Camilleri to strike fast. Marlboro is the only true international cigarette brand. But while it holds a 42% share in the U.S., PMI has less than 16% of the global market, so there's room to grow. Camilleri is unapologetic about hawking a product known to cause cancer. He's not trying to woo new smokers, he says, just encourage existing ones to switch to higher-quality cigarettes.

Born in Alexandria, Egypt, in 1955, a product of British boarding schools and the University of Lausanne, Camilleri joined Philip Morris in 1978. He's sold cigarettes ever since, spending the first 18 years of his career in overseas markets before coming to New York in 1996 as chief financial officer. As CEO, he sold off Miller Brewing in 2002, renamed the company Altria a year later, and spun off Kraft Foods (KFT) in 2007, moves that many say were aimed at leaving behind the taint of tobacco. Camilleri, though, says he loves what he does: "It's a great job. It's a fun job as well." A longtime smoker himself, Camilleri has quit just once, three years ago when he had a cold. He took it up again after three months "for no real reason other than that I enjoy it." Quitting, he says, "wasn't that difficult."

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