Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
KT&G opens Taiwan office on its way to become world's No. 4 tobacco maker
KT&G cigarette brands are displayed at a convenience store in Taiwan in this undated photo. The company opened its office in Taiwan, as part of its strategy of becoming the world's fourth-largest tobacco manufacturer by 2025. Courtesy of KT&G
By Yi Whan-woo
By Yi Whan-woo
KT&G has opened an office in Taiwan as part of its aim of becoming the world's fourth-largest tobacco manufacturer by 2025.
Taiwan has been one of KT&G's key markets after the Korean company started exports to the island nation in 2002 and upgraded its products sold there with premium-quality brands, such as Bohem, Esse and Time.
KT&G CEO Baek Bok-in
The company sold more than 771 million cigarettes in Taiwan in 2020, up more than 2,200 percent from 2002.
Against that backdrop, the firm will push to enhance its competitiveness and lay the groundwork for long-term business management in Taiwan through KT&G Taiwan Corporation, according to corporation head Kim Na-mi.
“We will set up a team to bolster marketing and sales activities, while working on new brands that fulfill consumers' needs,” Kim said, Monday.
She assessed the Taiwanese market has “a very prospective outlook,” noting that the country's consumer spending is recovering fast thanks to its highly effective COVID-19 response from early on and that Taiwan's gross domestic product (GDP) growth will be higher than previously forecast.
Formerly a public enterprise, KT&G has sought to strengthen its self-reliance after being privatized in 2002 as it was no longer possible to monopolize cigarette manufacturing in Korea.
Competition against the three global giants ― Philip Morris International, British American Tobacco and JTI ― made KT&G even more desperate to improve the quality of its brands.
Accordingly, the company diversified business portfolios by starting new product lines and putting the names of individual producers on cigarette packs it produces. KT&G was the first in the Korean tobacco industry to do so. The measure was part of efforts to ensure quality and win consumer trust, while introducing “customized” brands in overseas markets for international consumers.
For instance, KT&G came up with its Bohem Cigar line, made using cigar leaves in Taiwan for trend-sensitive consumers. The company also featured limited edition packs with special designs for the Bohem Cigar line in collaboration with a popular Taiwanese graphic designer.
Bohem accounts for 76 percent of KT&G's Taiwan sales, with those in their 20s and 30s and white-collar workers being their major consumers.
The company's vision to become the world's No. 4 tobacco maker by 2025 was introduced by CEO Baek Bok-in.
His term was extended during an annual meeting of shareholders, March 19. Industry sources say this will accelerate KT&G's advance in the global market.
Under Baek's stewardship, the company began exports to 23 more countries in 2020 during the coronavirus pandemic.
The firm operates in 103 countries. They include Burkina Faso, Cameroon, Guatemala, Israel, Mozambique where over 100 million cigarettes are sold, respectively.