Issue link: https://read.dmtmag.com/i/1541387
80 tobaccoasia Issue 6, 2025 November / December (AN ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 & SA 8000:2014 COMPANY) • MANUFACTURERS OF HIGH QUALITY CIGARETTE FILTER RODS - MONO ACETATE, SLIM, ULTRA SLIM, FLAVOURED, FILTER TIPS FOR RYO SEGMENT. EXPORT ENQUIRIES WELCOMED. • EXCLUSIVE BUSINESS PARTNERS WITH KAYMICH - GLUING & FLAVOURING SYSTEMS, ARKOTE - KNIVES, COESIA COMPANIES (G.D S.P.A./SASIB/ MOLINS ), MAX SCHLATTERER - ESBAND TAPES, SCHWEITZER MAUDUIT (PDM/LTR), BOEGLI-GRAVURES S.A., BENKERT- TIPPING PAPER AND OTHER LEADING COMPANIES. • EXPORTERS OF CIGARETTES AND TOBACCO. EXPORT ENQUIRIES SOLICITED. • PROVIDE MARKETING SERVICES IN INDIA, NEPAL AND UAE FOR THE CIGARETTE/TOBACCO INDUSTRY. the US and China, leveraging its strong domestic brand recognition and pre- mium positioning in products like ginseng sticks, films, and ampoules. However, as of late 2025, little news has emerged from the segment. In 2023, HFF revenue reached KRW1.394 trillion, with operating profit rising 32.6% to KRW 116.4 billion. Revenue grew only 0.3% from 2022, but over- seas sales showed some growth as KT&G exported health-functional and ginseng products to around 40 countries. In 2024, performance weakened: according to Top Daily (en.topdaily. kr), HFF sales declined 6.5% year on year, while operating profit dropped around 21%. The report attributed the decline to the reorganization of in- efficient sales channels and higher marketing costs, including new brand launches, which eroded margins. The segment's share of total company sales fell from 23.8% in 2023 to around 22% in 2024, indicating that, while still important, its contribution is shrinking. KT&G has provided no updated guidance or growth roadmap for HFF comparable to those for NGP or overseas combustibles, and no new factory or capacity expansion for HFF has been reported since 2023. Facing limited resources and stronger momentum in tobacco-related segments, the company appears to have refocused on cigarette exports, HTP consumables, and over- seas combustibles, relegating HFF to a secondary role. Still, the inclusion of HFF in the Altria MOU suggests KT&G has no intention of abandoning the business entirely. KT&G's playbook is strategically smart for a challenger. While ambi- tious, its strategy differs tactically from that of the major international players: it is export- and localization-driven, rapidly building capacity in manufacturing, HTP consumables, and soon pouches. Although a significant scale gap remains compared to the world's top four players, KT&G is emerging as a rising global force, poised to strengthen its position in value terms across selected categories and regions and to narrow that gap meaningfully over time. KT&G's Esse cigarettes, already popular in the Middle East and Central Asia, entered Germany this July with an 18% market share. Credit: Rivaldi Jovanka, Pexels.