KT&G Signs IQOS Supply Agreement with Philip Morris
Expands to 31 Countries Through 3-Year Partnership
President Baek Bok-in: "Growing as True Partners"
KT&G has signed an overseas sales contract with global tobacco company Philip Morris International (PMI) and is accelerating its efforts to pioneer overseas markets through the electronic cigarette lil. This contract marks a long-term partnership spanning 15 years, with KT&G selling electronic cigarette products worldwide through Philip Morris's global distribution network.
On the 30th, KT&G and PMI signed a product supply contract for the overseas sales of the electronic cigarette lil at the Conrad Hotel in Yeouido, Seoul. The signing ceremony was attended by KT&G President Baek Bok-in and PMI CEO Jacek Olczak, along with other company officials.
At the product supply contract signing ceremony for overseas sales of the electronic cigarette Lil held on the 30th at the Conrad Hotel in Yeouido, Seoul, Baek Bok-in, President of KT&G, and Jacek Olczak, CEO of PMI, are shaking hands. Photo by Song Seung-yoon
Before the contract signing, KT&G President Baek Bok-in expressed his welcome, saying, "Over the past three years, the two companies have created remarkable achievements together through a sincere cooperative relationship, not only in the tobacco industry but also in ways unseen in any other industry. Based on our understanding of the global market and consumers, and through active system sharing, we have seen meaningful growth in both market share and profitability in many countries where the product was launched."
He added, "Through three years of cooperation, our mutual understanding and trust have solidified, and this will serve as an opportunity to advance beyond the current partnership to become true partners."
PMI CEO Jacek Olczak emphasized, "More than one billion people worldwide still smoke combustible cigarettes, which is a challenge our generation faces. Through this contract, together with our partner KT&G, we will fulfill our role in ending combustible cigarettes with innovative smoke-free products."
He also stated, "Since the first collaboration contract in 2020, KT&G has built a unique and innovative smoke-free product portfolio and launched products in more than 30 countries globally, strengthening PMI's global portfolio. With this contract, KT&G will be able to continue expanding its smoke-free product business in global markets outside Korea by utilizing PMI's global commercialization infrastructure. This ongoing collaboration will yield positive results for consumers."
The contract period extends from today until January 29, 2038, spanning 15 years. KT&G will continuously supply electronic cigarette products to PMI, which will sell them worldwide. This includes devices such as 'lil Solid,' 'lil Hybrid,' and 'lil Able,' as well as dedicated sticks like 'Fit,' 'Mix,' and 'Aim,' along with future products to be launched. KT&G products are expected to be distributed in all countries where PMI sells smoke-free products. PMI guarantees sales of at least 16 billion sticks from this year through 2025 and plans to review performance every three years to flexibly respond to changing market conditions.
Since establishing their partnership in 2020, KT&G and PMI initially launched lil products in three countries, including Japan. They have since expanded sales channels to major European countries such as Italy and Greece, as well as Central Asia and Central America, reaching a total of 31 countries to date. KT&G forecasts an average annual sales growth rate of 20.6% and an average annual stick sales volume growth rate of 24% for its overseas NGP (Next Generation Products) business over the next 15 years.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
