Issue link: https://read.dmtmag.com/i/550310
30 tobaccoasia C M Y CM MY CY CMY K Japanese yen, core revenue and adjusted EBITDA increased 27.3% and 31.6% respectively, as a result of the currency depreciation against the US dollar. Moving forward in 2014, JTI remains op- timistic and plans to expand their product and geographic portfolios, including the successful completion of the rebranding of Mevius, JTI's acquisition of a stake in Russia's leading tobacco distributor, and the introduction of tobacco va- porizer Ploom in several markets. Korea South Korea's KT&G, the world's fifth largest global tobacco company exporting about 100 brands to 49 countries, saw its 2013 consolidated sales and operating profit decrease by 4.8% and 4.1% over the previous year, respectively. This was mainly due to sluggish tobacco sales volume led by tightening regulations in the domestic mar- ket, temporary reduction of exports to the Middle East, and a slowdown in sales from KT&G's other businesses from economic slump and weak pur- chasing power. In 2013, KT&G's tobacco sales in the domestic market posted KRW1.89 trillion (US$1.9 billion) and its market share was 61.7%. The Korean do- mestic tobacco market had been experiencing slug- gish growth due to price regulations such as higher taxation, restrictions on smoking areas, and anti- smoking campaigns. To cope with these market changes, KT&G launched high-priced premium brands and focused on clearly differentiating its strategic brands. In the regular category, new inno- vative brands such as Raison Ice Presso, Tonino Lam- orghini Ice Tornado, and This Africa were launched. Raison Ice Presso cigarettes contain ice capsules that cool the distinctive Raison Presso flavor when popped. The Tonino Lamorghini Ice Tornado has a tornado-shaped filter that rotates smoke fast and delivers flavors faster. This Africa cigarettes con- tain tobacco leaf processed by traditional African methods for a delicate and unique flavor. In the slim-sized category, KT&G introduced new brands: Bohem Cigar Mini, which is the world's first super-slim cigarette made by cigar-wrapping methods; Esse Presso, which allows users to enjoy two flavors at the same time; and Esse Change, the world's first super slim capsule cigarette made with KT&G's innovative technology and product development capabilities. KT&G also established its position as a market leader in product standards by commercializing the "blue band" technology. KT&G's new blue band technology allows for the manufacturing of cigarettes with low ignition propensity (LIP). This technology coats part of the cigarette paper with materials with low LIP to reduce fires caused by cigarettes. The company also successfully devel- oped the "seamless scented capsule" jointly with venture company At Lab. These thin capsules contain a mixture of aromatic scents and natu- ral oils, which, once put inside the filter, give the cigarette a special flavor. These initiatives helped KT&G surpass its 2013 target operating profit. In 2013, KT&G's international tobacco busi- ness recorded sales of 27.7 million sticks and KRW452.7 billion, a decrease of 32% and 28%, respectively, from the previous year. The company had to strategically reduce exports to Middle East- ern countries because local dealers tightened their inventory control to cope with declining demand due to the depreciation of local currencies, which was driven by US economic sanctions against Iran. To drive overseas business, KT&G made inroads into new markets in South America, Africa, and Europe, increased manpower, and launched new brands to increase sales capability in Southeast Asian countries. In 2014, KT&G intends to elevate its market dominance in the domestic market by capitalizing on expanding local distribution channels and a lineup of premium brands and employ diversified brand management strategies that are tailored to fit each consumer group. It also plans to continu- ously develop new overseas markets. KT&G has launched two new products in June 2014, the Raison Sun Presso and the Tonino Lamorghini Smartpack. The Raison Sun Presso is the latest addition to the Raison Presso line, each cigarette containing a capsule in the filter that when popped, releases a second flavor. Before the capsule is popped the cigarette gives off is a rich coffee flavor. The second flavor that comes into effect once the capsule is popped is a refreshing orange menthol flavor. The new package features an image of cool waves under the burning sun on the front of the pack and an image of a capsule popping open on the back. The Tonino Lamor- ghini Smartpack began from an idea suggested by a client through KT&G's website bulletin board. Listening to the needs of its clients, KT&G ex- plored the feasibility and design of this new prod- uct, which can be used as a smartphone stand as well as a cigarette pack. The company released a limited edition of the Smartpack last July and re- ceived an overwhelmingly positive response from consumers. The Smartpack is applied to all ciga- rette packs in KT&G's Lamborghini line, namely the L6, Ice Tornado, Icevolt, and Crispy.