Kwak Yeon-soo is a digital editor at The Korea Times creating, editing and curating digital content for the newspaper’s website, mobile app and social media. She previously covered a diverse array of cultural, political and business topics.
KT&G expands global business division
KT&G CEO Baek Bok-in, center, holds a regular meeting with the presidents of business units to discuss plans for the latter half of 2019. Courtesy of KT&G
By Kwak Yeon-soo
By Kwak Yeon-soo
KT&G has recently undergone restructuring that added more sectors to its global business division, apparently in a move to bolster its foreign investments amid sluggish cigarette sales and the declining birthrate.
The Korean cigarette company said it carried out a reorganization in July to reinforce its global business. It newly created four teams within the Global Division ― two overseas expansion teams and two overseas brand teams.
The expansion teams will open up emerging market opportunities whereas the brand teams will plan and execute successful localization strategies, the company said.
KT&G also vowed to strengthen its presence in the global market by extending its global network to 100 countries by 2020 and 200 countries by 2025.
“The latest move comes in line with our CEO's pledge to better cope with market changes and declining population,” a KT&G official said. “It is to expand the overall size of the pie.”
The tobacco market has been stagnant amid the government's push for a non-smoking policy in addition to a decline in overall population.
Sales of cigarettes edged down 0.6 percent in the first half of 2019 from a year earlier, according to data compiled by the Ministry of Economy and Finance.
Smokers purchased 1.67 billion 20-cigarette packs between January and June, 2019, compared to 1.68 billion packs in the same period last year. KT&G's cigarette sales were down by 100 million to 9.1 billion.
By contrast, overseas cigarette demand is on the rise. Over the same period, overseas cigarette sales totaled 8.1 billion, up 25 percent from a year ago.
Last year, cigarette sales in new emerging markets such as Africa and Latin America, and KT&G's overseas subsidiaries, such as Indonesia, recorded 20.8 billion and 12.2 billion, up 15 percent and 14 percent, respectively, from the previous year.
KT&G accounts for 63 percent of the nation's tobacco market, which does not include e-cigarettes.