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| KT&G's lil hybrid 2.0 tobacco heating device / Courtesy of KT&G |
By Nam Hyun-woo
KT&G said Monday it seeks to become the fourth-largest tobacco company in the world by 2025, by expanding its sales network in emerging markets and introducing new e-cigarette products to global consumers.
"KT&G aims to increase the number of exporting countries from 80 to over 200 by 2025," the company said in a statement. "Through this, we set the new goal of becoming the No. 4 tobacco company in the global market by then."
According to Euromonitor International, KT&G was the No. 5 tobacco maker in the world by sales volume and market share as of 2016, an accomplishment that came less than 20 years after it first entered the global market in 1999.
To accomplish its new goal, KT&G said it has been striving to explore new markets. For the past few years, the company's exports to new markets in Africa, South and Central America and the Asia-Pacific region have increased sharply, lowering its prior heavy reliance on markets in the Middle East.
According to the company, its exports to the Middle East, Central Asia and Russia amounted to 108.15 billion won ($90.32) in 2019, down from 169.89 billion won a year earlier. During the same period, exports to North America surged to 75.68 billion won from 53.67 billion won, and that of other markets also increased to 350.61 billion won from 313.06 billion won.
KT&G said it will bolster its performance in the overseas market by increasing investments in the distribution network and marketing infrastructure of its global subsidiaries. KT&G has established subsidiaries in Turkey, Russia, Indonesia and the U.S. The subsidiaries in the U.S. and Indonesia are showing exceptional sales growth.
Along with the growth of conventional tobacco products, KT&G said it is betting high on e-cigarette products' exports, highlighted by its strategic collaboration with Philip Morris International (PMI).
Under the deal, which was signed in January, KT&G will introduce its "lil" tobacco heating devices and their tobacco sticks across the world through PMI's global sales network spanning 180 markets.
KT&G and PMI seek to commercialize KT&G's lil models later this year in a number of markets, which the former said will be announced later. Further expansion will depend on initial market results.
"The global collaboration with PMI will be an important milestone for KT&G in marking its presence in the global next-generation tobacco product market and securing a distribution network for lil, which has already been highly recognized in the domestic market," KT&G said in the statement.
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