KT&G boosts global manufacturing with Turkey factory expansion

By Ko Dong-hwan

Korean tobacco giant KT&G expanded its factory in Turkey as part of its efforts to become a global top-tier company and strengthen its international operations.

The expansion ceremony, held in Tire, Izmir Province, on Thursday, was attended by 50 key participants, including KT&G CEO Bang Kyung-man, Tire District Gov. Vural Karagul, Korean Ambassador to Turkiye Jeong Yeon-doo, Tire Mayor Hayati Okuroglu and Ugur Yalcın, president of the Department of Tobacco and Alcohol.

KT&G has invested more than $60 million (87.5 billion won) to install two new high-tech manufacturing facilities at the factory. The factory, expanded 1.5 times, now has a total area of 25,000 square meters. Following the upgrade, it houses four cigarette-making machines with an annual production capacity of 12 billion sticks. This latest move brings KT&G's total investment in the Turkey factory to $110 million. The expansion also created 60 new jobs, increasing the factory's workforce to over 200 employees.

The factory will serve as KT&G's strategic hub and primary manufacturing facility to address the growing export demands of the steadily expanding Northern African and Latin American markets.

In 2008, KT&G established its first overseas factory in Turkey, marking the beginning of its global expansion. Since then, the company has strengthened its international operations and is currently constructing factories in Indonesia and Kazakhstan, with the Kazakhstan facility set for completion within the year. The company aims to leverage its global manufacturing network to establish a fully localized value chain encompassing manufacturing, operations and distribution, while also enhancing profitability.

The factory expansion is part of the growth investments announced by KT&G during its Future Vision Declaration Ceremony in January 2023. At the event, KT&G outlined its mid- to long-term vision of becoming a global top-tier company and unveiled a growth strategy centered on three core businesses: next-generation products, overseas cigarettes and health functional foods. The company aims to increase the proportion of its global revenue to 50 percent by 2027.

“The factory expansion has made the Turkey factory a global hub that will tow the growth of KT&G's global business and an outpost for a leap to a global top-tier (company), our group's vision for the future,” Bang said, adding that KT&G will continue to reinforce its competitive capabilities by investing in the three core businesses and its readiness for the future.