Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.
Shintanjin plant: KT&G's export hub
A box containing ESSE brand cigarettes is on a conveyor belt at KT&G’s Shintanjin plant in Daejeon. The cigarette maker’s largest plant produces ESSE and other brand products that are sold in 50 countries. / Courtesy of KT&G
By Lee Hyo-sik
By Lee Hyo-sik
KT&G, the country’s largest cigarette maker, has transformed itself into a global corporate giant with a presence in 50 countries from a largely domestic-focused enterprise.
The company has made inroads into the Middle East, Central Asia and other parts of the world over the years, becoming the world’s fifth-largest cigarette producer. It has developed a series of innovative, eco-friendly products and implemented a wide range of corporate social responsibility (CSR) activities to give back to local communities.
For KT&G’s rise to global stardom, its Shintanjin plant in Daejeon has played a pivotal role.
The plant, which produces the firm’s most popular ESSE brand, is the largest of its three production facilities. KT&G also runs plants in Yeongju, North Gyeongsang Province and Gwangju.
The Shintanjin plant, which began operation in 1965, recently underwent renovation and is now capable of producing nearly 50 billion cigarettes annually. The factory employs 1,000 workers and makes the ESSE brand and other super-slim category products, which are popular both at home and abroad.
“We completed the renovation of the Shintanjin plant in March 2014. It is completely different from what it used to be,” a KT&G spokesman said. “The facility has the state-of-the-art, fully-automated production lines from raw material processing to product packaging.”
The company said the plant is one of the world’s most advanced cigarette production facilities, adding its skilled workers ensure everything runs without a hitch.
KT&G, which accounts for 63 percent of the domestic market, exported 43.4 billion cigarettes to 50 countries in 2014, 27 percent more than in 2013.
“We sold about 56 percent of products in Korea and ship the remaining 44 percent overseas. Outbound shipments will likely exceed domestic consumption this year,” the spokesman said. “At first, we set up a presence in the Middle East, Russia and Central Asian nations. But then, we entered the United States, Turkey, Indonesia, and countries in Eastern Europe and Africa. We have successfully diversified our markets.”
KT&G established plants in Turkey in 2008 and in Iran in 2009. It then opened production facilities in Russia in 2010, producing mostly ESSE brand cigarettes. In 2011, the company also acquired an Indonesian cigarette maker to expand its reach in Southeast Asia.
“ESSE and other super-slim brand products have gained immense popularity among consumers across the globe. We will nurture more brands by introducing what consumers want,” the spokesman said.
In addition, KT&G has developed the “Blue Band,” the state-of-the-art technology that enables the production of cigarettes with low ignition propensity.
“Our cigarettes do not start fires even when they are discarded while still lit, thanks to our Blue Band technology,” he said. “We apply special coating materials to the surface of every cigarette, which has significantly reduced the possibility of butts igniting fires.”
The company invested 7 billion won over the past three years to develop the Blue Band and patented the technology in Korea and other countries.