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449 KT&G Develops ‘Aromatic Capsule’ in Partnership with an SME 2013.06.25




KT&G (CEO Min Young-jin) has jointly developed the “Seamless Aromatic Capsule” for cigarette filters in partnership with the venture company ATLAB and concluded a technology transfer agreement on June 24. 


This capsule wraps the raw material mixed with flavoring and natural oil in a thin film with a seamless line, and when the capsule in the cigarette filter bursts, a distinctive flavor is brought out. So far, KT&G has been dependent on import of all the capsules required for cigarette manufacturing because there is no commercialized technology.


KT&G has succeeded in the development of the capsule after six months of joint research with ATLAB, with the support of research grant to ATLAB totaling more than 400 million in order to apply ATLAB’s technology of manufacturing aromatic capsules for cosmetics to cigarette filters. KT&G has used this relationship as an opportunity to produce its own aromatic capsules, thus being able to reduce costs and foreign currency needs, and ATLAB has gained a foothold in making an entry into related markets estimated to be several ten billion won through the accumulation of application technologies.


ATLAB CEO Kim Young-taek said, This joint development with KT&G represents a good example of having created synergy through a win-win cooperation between the two companies, adding that we hope henceforward that this kind of collaboration system between a large company and an SME with respect to support for R&D and market exploration will spread across the industry to increase national competitiveness.


In addition to the development of aromatic capsules, KT&G has jointly developed cigarette materials, including filters, with two SMEs, such as KPT last year and early this year, to use for its products. KT&G has continued to practice its win-win management to realize mutual growth with SMEs, such as cash payments for subcontractors’ deliveries and sharing the profits generated from exceeding target cost goals with partner companies. 



Comparison of the Costs of Imports vs. Domestic Production


Import Unit Price

Unit Price of Domestic Production





Approx. 60% of import cost is saved.



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