KT&G aims for over half of sales from overseas business

During an investor event, KT&G announced its goal of generating more than 50% of its sales revenue from overseas operations by 2027.

The goal of this South Korean cigarette manufacturer is to achieve sales of 10 trillion Korean won ($8.1 billion) in a year, with a projected annual sales of 5.9 trillion Korean won ($4.8 billion) by 2022. Last year, approximately one-third of KT&G's sales may have come from foreign markets.

Bang Kyung-man, the executive vice president of KT&G, has announced that the company will not only focus on its combustible tobacco business but also strengthen its next-generation product (NGP) business, including heated tobacco products (HnB) and functional foods for health.

He stated, "We will invest KRW 40 trillion and construct new overseas production facilities over the next five years, while expanding existing facilities, to meet the continuous growth in NGP demand, such as HnB products.

Bang stated that the company is considering building a new factory in Kazakhstan or Eastern Europe. He mentioned that in order to raise the necessary funds, the company plans to sell unused properties and borrow from banks.

Since signing an agreement with PhiMo International in 2020 to commercialize KT&G's smoke-free products outside of Korea, KT&G has exported its HnB products to over 30 countries.

Currently, 90% of KT&G's revenue comes from cigarette sales, with the remaining 10% coming from their HnB products. The company has four tobacco manufacturing plants in South Korea, Russia, Turkey, and Indonesia, with a total annual production capacity of 13.6 billion cigarettes.