KT&G Builds New Heated Tobacco Production Facility to Make 10 Billion Sticks Annually
According to a report from the South Korean newspaper "Seoul Economic Daily" on July 4th, KT&G has added two new heat-not-burn (HNB) production facilities at its Sin Tanjin factory (KT&G's Korean factory), bringing the total number to seven.
According to reports, KT&G is planning to gradually increase the number of its HNB factories, with a projected increase to 10 by next year. Once the expansion is completed, the new factory in Sin Tanjin is expected to have a production capacity of 10 billion HNB sticks per year. In order to accommodate the growing production scale, KT&G also built an automated warehouse last year, capable of storing 400,000 boxes annually.
South Korean tobacco company KT&G has announced plans to gradually expand facilities in other domestic manufacturing plants. The company also aims to establish a new factory in Kazakhstan by the end of next year to meet the growing export demand. KT&G has already exported its HNB products and specialized pods to over 30 countries, with an average annual growth rate of 24% in sticks exports.
According to reports, KT&G's biggest driving force behind its expansion in the HNB business is the rapidly growing market. Data from market research firms such as EuroMonitor shows that the size of the HNB market in South Korea has grown from 490 billion Korean won in 2017 to 2 trillion Korean won in 2020, with an expected growth to 2.5 trillion Korean won by 2025. Last year, KT&G's share of HNB products in its overall tobacco sales also expanded to 25%. KT&G's goal is to increase this proportion to over 50% by 2025. KT&G's flagship product, Lil Hybrid, surpassed Philip Morris International (PMI) Korea in February last year, becoming the top player in the HNB market in South Korea.
South Korean tobacco company KT&G recently announced its future vision, focusing on three core businesses: HNB products, global tobacco, and functional health food. The company plans to invest approximately 40 trillion Korean won over the next five years, with a target sales revenue of 100 trillion Korean won. In particular, KT&G aims to invest 1.2 trillion Korean won in the field of new tobacco and achieve sales revenue of 20 trillion Korean won by 2027. Despite the challenges posed by the global economic downturn, KT&G remains committed to its long-term vision and will continue to actively invest.
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