On March 28th, according to reports from the South Korean news agency Yonhap, KT&G Corporation elected Bang Kyung-man as the new CEO and Chairman at its regular shareholders' meeting. In addition, KT&G also elected Professor Son Dong-hwan from the College of Law at Sungkyunkwan University as an outside director.
According to reports, KT&G has not changed its CEO for 9 years and has been led by internal personnel for over 20 years since privatization. This time, the company is still being led by internal personnel. Who is Bang Kyung-man, and what direction will he push KT&G towards in the future after taking office?
Who's Bang Kyung-man
Bang Kyung-man holds a bachelor's degree in Economics from Hankuk University of Foreign Studies in South Korea and a master's degree in Business Administration from the University of New Hampshire. Since joining Korea Tobacco & Ginseng Corporation (the predecessor of KT&G) in 1998, he has held several management positions within the company, including Brand Management General Manager, Global Headquarters Executive General Manager, Strategic and Planning Headquarters Executive General Manager, and Chief Commercial Officer.
Bang Kyung-man currently serves as the Chief Operating Officer, playing a crucial role in developing KT&G's mid to long-term growth strategy in three core business areas: next-generation products, health functional foods, and overseas combustible tobacco products. Under his leadership, significant achievements have been made by KT&G, including the successful introduction of the ultra-slim cigarette brand ESSE Change, which has become a cornerstone of the company's profitability. According to data released by the company, their "ESSE (Change)" with a tar content of 1 milligram has ranked first in the cigarette category of the "2021 National Brand Competitiveness Index (NBCI)" for the 12th consecutive year, becoming the preferred slim cigarette brand among younger consumers. In KT&G's 2022 financial report, Esse Change holds approximately 30% of the domestic cigarette market share in South Korea and about 80% of the domestic ultra-slim cigarette market share.
During his time as the head of the overseas business department, Bang Kyung-man also stood at the forefront of KT&G's globalization. In his tenure from 2015 to 2021, he significantly expanded KT&G's sales markets from 40 to over 100. The HNB business achieved a milestone in 2017 with overseas annual sales exceeding 1 trillion Korean won (7.5357 billion USD), marking a significant event for the company in the novel tobacco sector.
What Direction will KT&G, Led by Mr. Bang, Head towards?
The KT&G board of directors has selected the current KT&G Chief Operating Officer, Bang Kyung-man, as the final candidate for Chief Executive Officer. The committee had previously outlined five key abilities in the "CEO recruitment notice," including management expertise, global acumen, strategic thinking abilities, stakeholder communication skills, and universal ethical and moral awareness, and used these criteria to carefully evaluate each shortlisted candidate. The board stated that Bang Kyung-man's qualifications and abilities meet the requirements for the position of KT&G Chief Executive Officer.
The CEO candidate recommendation committee firmly believes that Bang Kyung-man has a deep understanding of the overall business operation of KT&G, making him the most qualified candidate. They also see him as a potential leader who can overcome market constraints and drive KT&G to become a "top global" company.
In 2023, KT&G's annual revenue reached 5.87 trillion South Korean won (43 billion US dollars), nearing the "Six Trillion Club." Last year, the group's overseas cigarette sales increased by 12.8% year-on-year, reaching 1.139 trillion South Korean won (8.45 billion US dollars), driving overall performance growth. KT&G continues to expand its next-generation business overseas - Next Generation Products (NGP). In early 2023, the company signed a 15-year overseas business agreement with the global tobacco giant, Philip Morris International (PMI), and has since established distribution networks in 31 countries, capturing 80% of the global NGP market.
At the beginning of 2024, as the management changes are taking place, KT&G has become embroiled in a public controversy due to its declining stock price, weak profit performance, and opaque CEO selection process. Bang previously stated that he felt a great responsibility when nominated as a candidate for the company in the face of rapidly changing market conditions. He said he will "proactively promote innovation, seek out the next growth opportunity, and elevate KT&G to become a world-class company.
According to the committee, there is a widespread expectation within the company that Bang Kyung-man, after being promoted to CEO, will increase the corporate and shareholder value of KT&G through his bold decision-making and strong leadership in building a differentiated business strategy. How Bang will adjust the Korean cigarette market during his tenure and how he will make breakthroughs in the new tobacco field are eagerly awaited by the industry.
2FIRSTS will continue to track the latest developments of South Korea's largest tobacco company.
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