HQ
South Korea
OWNERSHIP
Publicly Traded
RANK
7
(out of 15)
FINAL SCORE
0.66
(out of 5)

Company Overview

KT&G is the dominant tobacco manufacturer in South Korea. The company is also present internationally through its cigarette portfolio in Africa, the Americas, Asia-Pacific, the Middle East, and Russia. Between 2017 and 2019, KT&G entered two reduced-risk categories – heated tobacco and cartridges. While these products were only available in South Korea in 2019, in 2020 the company signed an agreement with PMI for the international distribution of its reduced-risk products internationally. As a result, the first reduced-risk KT&G products were exported to Russia. The company’s investment activities support both high-risk and reduced-risk product development.

Stance on Harm Reduction

KT&G has not made an explicit commitment to harm reduction and has no intention to phase out cigarettes. KT&G introduced reduced-risk alternatives in 2017 within its home market, but its motivation appears to be purely commercial. It has emphasized the importance of the reduced-risk business, although in conjunction with high-risk products.

Notable Performance

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Strategy and Management

KT&G has no harm reduction commitment but has grown sales of reduced-risk products rapidly since offering heated tobacco in 2017.
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Product Sales

KT&G has registered rapid growth in its heated tobacco sales in South Korea while maintaining its sales from cigarettes in international markets.
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Capital Allocation

KT&G’s investments are split between expanding reduced-risk products in South Korea and consolidating high-risk products in international markets.
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Product Offer

Between 2017 and 2019, KT&G added heated tobacco and cartridges to a previous portfolio of cigarettes only.
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Marketing

KT&G does not offer a detailed marketing policy outside of conforming to laws and regulations.
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Lobbying and Advocacy

KT&G does not disclose details of engagement policies with regard to tobacco harm reduction

Net Value Sales

In 2019
High-Risk Products
95.0%
Reduced-Risk Products
5.0%

Products Offered

In 2019
High-Risk Products
1
Reduced-Risk Products
2

Capital and R&D Investment

Over 2017-2019
High-Risk Products
54.5%
Reduced-Risk Products
45.5%

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