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KT&G extends Q2 growth streak on robust global sales
KT&G extends Q2 growth streak on robust global sales

Korea Herald

time6 days ago

  • Business
  • Korea Herald

KT&G extends Q2 growth streak on robust global sales

KT&G, South Korea's leading tobacco manufacturer, has logged three consecutive quarters of revenue and profit growth through the second quarter, backed by strong demand in key global markets. According to the company on Thursday, sales in the April-June period jumped 8.7 percent on-year to reach 1.55 trillion won ($1.12 billion), with operating profit surging 8.6 percent to 350 billion won. Having sustained revenue and profit growth since the fourth quarter of last year, the company also reported that first-half revenue surpassed the 3 trillion won mark for the first time. 'We have secured mid- to long-term growth momentum based on the excellent performance of new product launches in major global markets as well as brand power-based price hikes,' a KT&G official said, adding that the company aims to achieve double-digit annual growth in operating profit this year. KT&G's core tobacco segment sustained its growth trajectory, with revenue and operating profit rising by 10 percent and 1.6 percent on-year, respectively. The global cigarette business, in particular, marked its fifth consecutive quarter of growth in revenue, profit and sales volume. Revenue and volume both hit new quarterly records, with revenue up 30.6 percent on-year to 469 billion won and sales volume rising 9.1 percent to 16.7 billion sticks. Adjusted operating profit, excluding last year's allowance for doubtful account refunds, soared 51.1 percent. Under the vision of CEO Bang Kyung-man, the company has prioritized full localization of its value chain and established smaller local units to respond more agilely to market needs. Cost reductions are expected in the second half of the year, once its raw material sourcing system is fully localized. Outside its core tobacco business, the company's domestic next-generation products segment captured a 45.8 percent market share in the first half, driven by robust sales of its heat-not-burn device Lil Aible. The health functional foods segment, operated by Korea Ginseng Corp., posted an operating profit of 6.2 billion, turning profitable as a result of optimized marketing spend and a focus on profitability-driven strategies.

K-cigarettes go global: KT&G lights up overseas markets
K-cigarettes go global: KT&G lights up overseas markets

Korea Herald

time12-07-2025

  • Business
  • Korea Herald

K-cigarettes go global: KT&G lights up overseas markets

KT&G's overseas cigarette sales outstrip domestic in Q1; market sees trend moving forward As beauty and food products lead the so-called K-frenzy, Korean cigarettes are becoming the next major export success, powered by KT&G, the country's largest tobacco company. In the first quarter of this year, the company's overseas cigarette sales reached 449.1 billion won ($327 million), surpassing domestic sales of 373.6 billion won for the first time — momentum that analysts expect to persist throughout the year. This quarter saw overseas cigarette sales rise 23 percent in volume and 54 percent in revenue from a year earlier, while domestic sales fell by 9.3 billion won. 'It underscores the shift toward an overseas-centered structure,' said an analyst at Kyobo Securities, noting that the overseas sales share in KT&G's tobacco division rose from 39.5 percent last year to 47.5 percent this quarter. KT&G's overseas cigarette sales rose from 1.01 trillion won in 2022 to 1.13 trillion won in 2023, then climbed 28 percent to 1.45 trillion won last year. According to financial information provider FN Guide, KT&G is forecast to post 6.34 trillion won in total sales for the full year, a 7.3 percent increase from last year, with operating profit rising nearly 10 percent to 1.31 trillion won. The achievement manifests CEO Bang Kyung-man's aggressive drive to build a fully localized global value chain, enhancing agility and profitability in local markets. 'With a spirit of challenge, KT&G will continue to expand its global direct business to enhance both profitability and corporate value,' Bang said. Backed by region-specific strategies and expanded direct sales channels, KT&G, which now exports to 135 countries, has positioned its ultra-slim cigarette brand, Esse, at the forefront of global markets. The brand has gained significant traction across Asia-Pacific, with Indonesia accounting for over 20 percent of KT&G's total overseas sales. There, KT&G has pursued a successful localization strategy, offering products like Esse Berry Pop to cater to Indonesian consumers' preference for clove-based cigarettes. In Mongolia, KT&G has held over 50 percent market share since 2023, with annual sales rising from 300 million sticks in 2011 to 2.35 billion last year. Starting in June, KT&G made inroads into India's tobacco market by signing a distribution deal with local firm Kedara Trading LLP to launch its premium cigarette lineup in major cities such as New Delhi and Mumbai. According to the company, India is expected to become a new growth engine thanks to its rapidly expanding middle class and increasing demand for premium foreign cigarettes. 'To strengthen our global business performance, we set up in-house independent units for the Asia-Pacific and Eurasia regions last year, establishing dedicated strategy and marketing teams within each to enhance direct regional operations,' said a KT&G official. Esse's popularity extends beyond Asia. In the first quarter, the United Arab Emirates was KT&G's largest export destination, with shipments more than doubling to over 3,000 metric tons. From there, products are reexported throughout the Middle East. In line with its expanding global footprint, KT&G is boosting its overseas production capacity. In April, it completed a new factory in Kazakhstan with an annual capacity of 4.5 billion sticks, and construction of a new plant in Indonesia is underway.

KT&G completes Kazakhstan plant to accelerate growth in Eurasia
KT&G completes Kazakhstan plant to accelerate growth in Eurasia

Korea Herald

time23-04-2025

  • Business
  • Korea Herald

KT&G completes Kazakhstan plant to accelerate growth in Eurasia

South Korea's top tobacco company KT&G announced Wednesday that it has completed construction of its new factory in Kazakhstan, a key production hub for the company's expansion into the Eurasian market. At a completion ceremony held Tuesday at the factory site in Almaty, Kazakhstan -- attended by KT&G CEO Bang Kyung-man, Almaty Gov. Sultangaziev Marat Eleusizovich, and Korean Ambassador to Kazakhstan Cho Tae-ick -- KT&G highlighted the new facility's role as both a core production base and an export outpost, designed to meet growing demand across the Eurasian markets and broader European region. The Kazakhstan factory, spanning a total floor area of 52,000 square meters, houses three manufacturing lines and boasts an annual production capacity of 4.5 billion sticks. 'The completion of the new plant marks a key step in building our global manufacturing infrastructure, which will drive our international competitiveness," said CEO Bang Kyung-man. 'With a spirit of challenge, KT&G will continue to expand its global direct business to enhance both profitability and corporate value, while sharing the gains with our stakeholders.' The Kazakhstan plant is part of KT&G's capital expenditure strategy, aligned with its goal of boosting global revenue growth. The company aims to raise the share of international sales to 50 percent by 2027 by strengthening its core business competitiveness and expanding direct operations abroad. In addition to the new facility, KT&G operates a global manufacturing network across plants in Korea, Indonesia, Russia and Turkey. Through this network, the company aims to establish fully localized value chains, managing everything from production and operations to distribution. Also on Tuesday, KT&G signed a memorandum of understanding for the green globe project with the Kazakhstan Ministry of Ecology, Geology and Natural Resources and the Asian Forest Cooperation Organization, reinforcing its commitment to local environmental sustainability. Through the initiative, KT&G will support reforestation and wildfire recovery efforts in the Abai region, which was affected by wildfires in June 2023. The project includes restoration support as well as the development of preventive measures.

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