Issue link: https://read.dmtmag.com/i/1541387
76 tobaccoasia Issue 6, 2025 November / December By Stefanie Rossel In late September, KT&G, South Korea's leading cigarette manufacturer, expanded its core busi- ness portfolio by entering the fast-growing nicotine pouch category. Together with Altria, the com- pany acquired Swedish-based pouch manufacturer Another Snus Factory (ASF). The deal followed a non-binding global collaboration memorandum of understanding (MOU) with KT&G Corpora- tion (KT&G) to leverage the companies' complementary strengths and offerings in the joint pursuit of long-term growth opportunities in modern oral nicotine products, non-nicotine products, and operating efficiency in traditional tobacco. In addition, an Altria subsidiary and KT&G's subsidiary, Korea Ginseng Corporation (KGC), a leading Korean ginseng company, will jointly explore op- portunities in the US, focusing on the growing energy and wellness segment. KT&G said the partnership will use its global distribution network to support the rollout of both ASF and Altria products in international markets. With the takeover of ASF, maker of Loop nicotine pouches, KT&G is tapping into the modern oral category, the global size of which is estimated at US$5.6 billion in 2025 by Cognitive Market Research and forecast to grow at a compound annual rate (CAGR) of 30.5% from 2025 to 2033. The move marks the latest step in KT&G's aggressive expansion strategy aimed at trans- forming it into a top-tier global tobacco company. In late January 2023, then c.e.o. Baek Bok-in announced the "2027 KT&G Vision," a growth strategy focusing on three business areas: heated tobacco products (HTP), health functional foods (HFF), and the company's overseas combus- tibles business. By 2027, KT&G aims to generate KRW10 trillion (US$6.9 billion)* in annual sales. According to Baek, more than half of that revenue should come from overseas markets. To achieve this ambitious goal, KT&G announced a large-scale investment of KRW4 tril- lion through 2027, intended to develop the HTP and HFF segments into core growth businesses by establishing a virtuous-cycle model that reinvests earnings from established businesses such as cigarettes into new, expanding categories. Almost three years after launching its 2027 Vision, KT&G is largely on course—thanks to robust growth in overseas cigarettes and HTP. The company's financial trajectory remains on track toward the KRW10 trillion goal, although annual growth slowed after record sales of KRW5.85 trillion in 2022. Year-on-year growth in 2023 and 2024 stood at 0.3% and 0.8%, respec- tively, resulting in consolidated revenue of KRW5.91 trillion in 2024. However, the first half of With its ambitious expansion strategy, KT&G is becoming a player to be reckoned with internationally. KT&G's 2027 Global "Vision" on Track KT&G has invested heavily in new factories and capacity expansion. In April this year the company completed construction of its fourth overseas factory in Kazakhstan, following the expansion of its plant in Turkiye three months earlier. Credit: KT&G. *US$1.00= KRW1,450