New site’s role broadens

Inside Philip Morris USA's Research & Technology Center in downtown Richmond, the company is doing more than just scientific research.

More than a year after the center opened in the Virginia BioTechnology Research Park, the scope of the work done there has broadened to reflect the company's growing portfolio of tobacco products and an emphasis on consumer research.

"Over the last few years we have evolved," said Jack Nelson, executive vice president and chief technology officer for Altria Group Inc., the Henrico County-based parent company of Philip Morris USA. "As your business evolves, you want your research and development activities to evolve."

Nelson has an office at the downtown center in addition to Altria's West Broad Street headquarters.

While the company continues to work on product development, Altria Group Inc. also is cutting costs, which is likely to affect the resources it devotes to research. The company recently confirmed it is cutting jobs in the Richmond area as part of a cost-saving initiative, but it has not released the number of employees. The job cuts affect Altria's Client Services unit, which includes research and development.

Philip Morris USA was a cigarettemaker for global markets when it announced plans for the $350 million research center in 2005, but it has since separated from its global sister company, Philip Morris International. With the spinoff of that business unit, Altria has added to its U.S. portfolio by acquiring John Middleton Inc., a Pennsylvania-based mass-market cigar-maker.

Once the firm's planned acquisition of Connecticut-based UST Inc. closes next year, the company's portfolio also will include well-established smokeless-tobacco products.

The downtown site will serve as a research center for all those subsidiaries, Nelson said. The center is part of Altria Client Services.

Altria is moving employees from many of its Richmond-area operations to work downtown, including some from its operations center adjacent to its manufacturing plant in South Richmond. About 300 employees will be working in the research center within a few months, not including contractors.

While that includes scientists and engineers, the work at the center involves many aspects of the company's business, from product development to marketing. A portion of the second floor, for example, is devoted to employee training on regulatory compliance issues.

"We are a consumer packaged-goods company," Nelson said. "That involves science and technology and discovery, but it also involves thinking about what the consumer wants."

Plans for the building included bedrooms for research subjects to stay overnight as part of clinical trials, but Nelson said the company is not doing that there. Altria has conducted clinical research on the effects of smoking as part of a larger project that involved research at universities and medical facilities around the country. That program has since been phased out.

Instead, the company is doing consumer research at the downtown Richmond center that involves bringing in volunteers to try potential new products. "We decided that for the information that we are looking for, we don't need people isolated in some clinical setting," Nelson said. "It is OK for them to come in and try a product and go home."

Plans for the center also included an area for animal testing, which Nelson said is not being utilized.

"We have the capability, but we haven't done any of that," he said.
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