▶KT&G Shintanjin Plant, the world’s largest umtra slim tobacco factory

KT&G’s Cigarette Exports Exceed 500 Billion Sticks
- Growth continues via exports despite the reduced domestic demand

KT&G said that its outbound sales of cigarettes have broken the 500 billion unit mark.

According to data from KT&G on Sept. 16, its outbound sales volume reached 500.2 billion cigarettes as of Sept. 15. Counting in the cigarettes produced in KT&G’s overseas factories, the overall number increases to 532.1 billion sticks.

KT&G’s outbound sales performance has seen a drastic improvement since the former state-run enterprise was privatized in 2002. The annual outbound sales was only 2.6 billion cigarettes in 1999, and jumped to 28.5 billion in 2005. The figure stood at 40.7 billion in 2012 after 10 years of privatization, increasing more than 15 times. Also, the sales revenue, US$14.76 million (17.34 billion won) in 1999, leaped more than 37-fold to US$560 million (657.72 billion won) in 2012, and the cumulative outbound revenue reached US $5.77 billion (6.78 trillion won).

The Korean tobacco-maker also expanded its overseas market from some Middle Eastern countries and Russia in the early stage of privatization to 50 countries in Southeast Asia, the Americas, and Europe. Accordingly, KT&G has positioned itself as the world’s fifth-largest tobacco manufacturer.

KT&G’s overseas sales are expected this year to surpass its domestic sales for the first time. During the first half of 2015, domestic sales decreased by 17% to 17.1 billion cigarettes due to cigarettes price increase. On the other hand, overseas sales including products from overseas plants amounted to 22.9 billion cigarettes which is 33.9% more than domestic sales. Overseas sales increased by 13.4% compared to 20.2 billion cigarettes of the first half of 2014.

In February, KT&G reorganized to make global business division as a CIC (Company In Company) with independent finance and human resources team, in order to expand exports and recover from reduced domestic demand due to tobacco price increase.

Overseas sales of KT&G’s flagship Esse cigarettes have surpassed 150 billion units since its maiden export of 6 million units in 2001. Esse, the top seller, accounts for one third of ultra slim brand in the world.

KT&G said, “Regardless of difficulties of exports by Korean companies, KT&G has increased its exports via aggressive overseas market penetration. KT&G will keep striving for sustainable growth via overseas marketing expansion”.