KT&G Accelerates Global Manufacturing through Türkiye Factory Expansion

Rhea-AI Summary

KT&G (KRX: 033780) celebrated the expansion of its Türkiye factory with a $60 million investment, installing two new high-tech manufacturing facilities. The expanded facility, now 25,000 square meters, features four cigarette-making machines with an annual capacity of 12 billion sticks. The expansion created 60 new jobs, bringing total employment to over 200 people.

The Türkiye factory, KT&G's first overseas facility established in 2008, will serve as a core manufacturing hub for exports to Northern African and Latin American markets. This expansion is part of KT&G's strategy to become a 'Global Top-tier' company, focusing on Next Generation Products, overseas cigarettes, and health functional foods. The company aims to increase its global revenue proportion to 50% by 2027.

KT&G's total investment in Türkiye now reaches $110 million, with additional factories under construction in Indonesia and Kazakhstan. The company operates through six global corporations and various branches worldwide.

Positive

• Increased production capacity to 12 billion cigarette sticks annually
• $60 million investment in new high-tech manufacturing facilities
• Factory expansion creates 60 new jobs
• Strategic positioning for North African and Latin American market expansion
• Clear growth target of 50% global revenue by 2027

Negative

• None.

- Expedites exports to North Africa, Latin America, and other locations by instating basis for global business

SEOUL, South Korea, Jan. 19, 2025 /PRNewswire/ -- On the 16^th, KT&G Corporation ("KT&G") (KRX: 033780) hosted a ceremony celebrating the Türkiye factory expansion. The expansion is part of KT&G's efforts to leap to a "Global Top-tier" and to strengthen its global operations.

Around 50 major participants, including KT&G's CEO Kyung-man Bang, Tire District Governor Vural Karagül, the Korean ambassador to Türkiye Yeon-doo Jeong, Tire Mayor Hayati Okuroğlu, and President of Department of Tobacco and Alcohol Uğur Yalçın attended the factory's ceremony held in Tire, Izmir. 

KT&G invested more than $60 million to install two new high-tech manufacturing facilities. The factory was expanded by 1.5 times and now has a total area of 25,000 square meters. After the expansion, the Türkiye factory has a total of four cigarette making machines with a capacity to produce 12 billion sticks of cigarettes annually. After this investment, KT&G's total investment adds up to $110 million. The expansion created 60 new jobs, and a total exceeding 200 people will be employed by the Türkiye factory.

The Türkiye factory will become KT&G's outpost and core manufacturing facility to meet export demands to the Northern African and Latin American markets that are showing steady growth.

In 2008, KT&G established its first overseas factory, the Türkiye factory. KT&G has since continued to fortify its global operations; currently KT&G is building factories in Indonesia and Kazakhstan, and the Kazakhstan factory construction will be completed within the year. KT&G plans to use its global manufacturing basis to create a completely local value chain that oversees everything from manufacturing to operations and distribution, increasing its profitability.

The Türkiye factory expansion comes as part of the growth investment KT&G has announced during the "Future Vision Declaration Ceremony" in January of 2023. During the ceremony KT&G presented its mid to long-term vision of becoming a 'Global Top-tier' as well as its growth strategy of focusing on the three core businesses—NGP (Next Generation Products), overseas cigarettes, and health functional foods. KT&G plans to increase the proportion of its global revenue to 50% by 2027.

Kyung-man Bang, CEO of the KT&G, stated that "the factory expansion has made the Türkiye 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', our group's vision for the future" and that "KT&G will continue to reinforce its competitive capabilities by investing in the three core businesses and through its readiness for the future".

Tire District Governor Vural Karagül thanked KT&G for its investments during his congratulatory speech, going on to say that "the KT&G factory will contribute to the local economy while facilitating the sustainable growth of Tire with its environmentally-friendly manufacturing operations."

KT&G has six global corporations in various locations like Uzbekistan, Türkiye, Indonesia, and Taiwan, and branches in Mongolia, Europe, and China to continuously grow its global business. KT&G is well known for its brand ESSE and BOHEM.

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SOURCE KT&G Corporation

FAQ

What is KT&G's (KTCIY) production capacity after the Türkiye factory expansion?

After the expansion, KT&G's Türkiye factory has four cigarette making machines with a capacity to produce 12 billion sticks of cigarettes annually.

How much did KT&G invest in the Türkiye factory expansion?

KT&G invested more than $60 million in the Türkiye factory expansion, bringing their total investment in Türkiye to $110 million.

What is KT&G's global revenue target for 2027?

KT&G plans to increase the proportion of its global revenue to 50% by 2027.

How many new jobs were created by KT&G's Türkiye factory expansion?

The factory expansion created 60 new jobs, bringing the total employment at the Türkiye factory to over 200 people.

What markets will KT&G's expanded Türkiye factory serve?

The Türkiye factory will serve as an outpost for export demands to the Northern African and Latin American markets.