KT&G posted KRW1.46 trillion ($1.31 billion) in consolidated sales for the third quarter of this year, up 10.7 percent from last year, reports The Korea Times. During the same period, operating profit grew 13.6 percent to KRW434.6 billion.
The South Korean cigarette manufacturer’s performance was boosted by overseas sales, which grew 28.2 percent year-on-year to KRW262.9 billion. KT&G said it sold 12.7 billion cigarettes abroad from July to September, up 30.9 percent from a year earlier. The increase was largely due to growth in the Middle East and the expansion of the sales networks of its U.S. and Russian subsidiaries.
Following the latest results, KT&G appears to be well on its way of realizing CEO Baek Bok-in’s goal of becoming the No. 4 player in the global cigarette market by 2025. In 2018, KT&G was No. 5 in terms of sales volume, according Euromonitor International.
The company exported products to approximately 50 countries in the third quarter of 2017, but this grew to 90 in the third quarter of this year. Revenue from exports grew by KRW28.2 billion, outpacing the KRW22.2 billion growth in domestic sales during the same period.
The company said it will increase the number of export markets to 100 by the end of this year and double the number by 2025.
KT&G attributes its success to increased investments for product improvements.
Tobacco heating products, too, have contributed to the company’s performance. Earlier this year, KT&G signed an agreement with Philip Morris International so that the latter would distribute KT&G’s tobacco heating products in overseas markets. Following the agreement, KT&G’s Lil tobacco heating devices and their exclusive cigarette products began exports to Russia in August, Ukraine in September and Japan in October.
In October, Morgan Stanley Capital International assigned KT&G a top grade in an environment, social and governance evaluation. KT&G ranked first among 11 tobacco companies for product safety and quality due to its responsible marketing and outstanding quality management. It also earned a high score for supply chain labor standards.
Tobacco Reporter featured KT&G’s global ambitions in its July 2020 print edition.