KT&G signs deal to distribute smokeless products worldwide

Industry

Published: 30 Jan. 2023, 17:13

KT&G signs deal to distribute smokeless products worldwide

KT&G CEO Baek Bok-in, left, and PMI CEO Jacek Olczak sign a 15-year supply deal to globally distribute KT&G's smoke-free products at a commemorative ceremony at the Conrad Hotel in Yeouido, western Seoul, on Monday. [KT&G]

KT&G signed a 15-year supply deal with Phillip Morris International (PMI) to globally distribute its smoke-free products such as lil heat-not-burn tobacco devices, the company announced Monday.

Through the deal, KT&G will supply its heat-not-burn (HNB) cigarettes to its global distributor PMI, which will export the products worldwide except for Korea until Jan. 29, 2038.

KT&G CEO Baek Bok-in and PMI CEO Jacek Olczak signed the deal at the Conrad Hotel in Yeouido, western Seoul.

Products which KT&G will export overseas include HNB products such as lil Solid, lil Hybrid, lil Aible and heatstick devices such as fiit, miix, aiim, as well as products the company will introduce in the future.

PMI guaranteed the distribution of at least 16 billion sticks from 2023 to 2025.

KT&G predicts that overseas sales of its smoke-free products will grow at an average of 20.6 percent annually for the next 15 years.

The Korean tobacco giant started exports of its products through a distribution agreement with PMI from January 2020. The two companies currently export lil cigarettes in 31 countries including Japan, Italy and Greece.

“We are now able to further raise the competitiveness of KT&G’s smoke-free products in overseas markets and establish a basis for stable growth of our global business through the advancement of the strategic partnership with PMI”, Baek said.

“KT&G will make efforts to acquire world-class capabilities to become a global top-tier company in newer nicotine and tobacco products at a faster pace and to lead the next generation tobacco market."

“Smoke-free products of the two companies will play a complementary role to each other, providing a more innovative product portfolio to more consumers," Olczak said.

“This agreement clearly shows the two companies’ commitment to provide better alternatives to about 1 billion smokers around the world."

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]