KT&G sells more cigarettes abroad than home

By Lee Hyo-sik

KT&G, the country’s largest cigarette maker, sold more products abroad than at home last year, the first time since 1999 when the firm began exports.

This marks a turning point in the company’s endeavor to transform itself into a global corporate giant from an enterprise largely focused on the domestic market.

The cigarette maker, headed by CEO Baek Bok-in, said Monday that it sold 46.5 billion cigarettes outside Korea, surpassing its domestic sales of 40.6 billion. The firm exports various cigarette brands from its three plants here, while operating four plants abroad.

Its overseas sales stood at a mere 2.6 billion in 1999 but have soared over the past 17 years. From 1999 through 2015, the company sold 540 billion in more than 50 foreign countries.

In 2015, the Middle East accounted for 48.8 percent of KT&G’s overseas sales, followed by Latin America and Europe with 14.2 percent, and Central Asia with 11.5 percent. The ESSE brand cigarettes were the most popular, accounting for 55.5 percent of the firm’s total sales abroad, followed by Pine with 29.2 percent and Time at 5.3 percent.

“We have 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,” said a KT&G spokesman. “We have also developed a series of innovative, eco-friendly products and implemented a wide range of corporate social responsibility activities to give back to local communities.”

At first, KT&G set up a presence in the Middle East, Russia and Central Asian nations, the spokesman said, adding that the company then entered markets in United States, Turkey, Indonesia, and countries in Eastern Europe and Africa.

“We have successfully diversified our markets,” he said.

KT&G’s aggressive move to set up production facilities abroad has helped it bolster its outbound shipments.

The company 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.

In Korea, the cigarette maker’s largest plant is in Daejeon, which produces mostly the ESSE brand. It also operates plants in Yeongju, North Gyeongsang Province and Gwangju.