KT&G to build tobacco factory in Kazakhstan

KT&G CEO Baek Bok-in, fourth from left, shovels sand with Governor of Almaty Province Marat Sultangaziyev, third from left, and Korean Consul General in Almaty Park Nae-cheon, second from left, during a groundbreaking ceremony for the company's new factory in Almaty, Kazakhstan, Wednesday. Courtesy of KT&G

KT&G has launched construction of a new factory in Kazakhstan to expand its market in Eurasia, Korea's largest tobacco company said Thursday.

The groundbreaking ceremony took place at the site in Almaty Province on Wednesday. The company's CEO Baek Bok-in, Governor of Almaty Marat Sultangaziyev and the Korean Consul General in Almaty Park Nae-cheon were among over 70 participants at the event.

The factory site will cover an area of approximately 200,000 square meters and function as a "hybrid production facility" pipelining next-generation-products (NGPs) like electronic cigarettes and conventional cigarettes (CC) for consumers in Europe and the Commonwealth of Independent States region, according to the company.

The company has pinpointed Kazakhstan as a starting point for the expansion of its network throughout the regions. Last January, KT&G established local sales and manufacturing subsidiaries in the country. The bid, together with the completion of the factory in Almaty, will equip the company with a complete local value chain to oversee the entire process of manufacturing and sales across the target regions.

The company last January announced its goal to reach the "global top tier" and decided to focus on NGP, CC and functional health foods as its three core fields. It said it will increase its sales in overseas markets by more than 50 percent by 2027.

Last September the Indonesian Ministry of Investment agreed with KT&G to invest in the company's construction of a new manufacturing plant in East Java Province. The factory, according to the company, will be its main post for market expansion in Southeast Asia.

"The new Kazakh factory will be our global core manufacturing hub with its coverage over the Eurasian market and our frontline to join the global top tier," Baek said.

Leading the NGP market in Korea, KT&G has main factories in Daejeon's Sintanjin and Gwangju. It said the manufacturing plants will be further expanded to secure its market leadership in Korea and throughout the world.