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| KT&G CEO Baek Bok-in, left, poses with Philip Morris International (PMI) CEO Jacek Olczak after signing a 15-year contract to supply "lil" series heat-not-burn products to the multinational tobacco maker at Conrad Hotel in Seoul, Monday. Courtesy of KT&G |
By Kim Jae-heun
KT&G has inked a 15-year deal with global tobacco company Philip Morris International (PMI) to expand its worldwide business for heat-not-burn products, the company said Monday.
The two firms held the KT&G-PMI Global Collaboration event to sign a product supply contract for overseas sales of KT&G's "lil" series.
Under the contract, KT&G will supply its e-cigarettes to PMI through 2038 and PMI will sell them in all countries except Korea.
"Through the advancement of the strategic partnership with PMI, KT&G's e-cigarette products will further enhance their global competitiveness and lay the foundation for stable overseas growth," KT&G CEO Baek Bok-in said during a press conference held at Conrad Hotel in Seoul. "In order to become a top-tier company early on, we will strive to secure world-class capabilities and lead the next-generation tobacco market."
The target products of the contract include heat-not-burn products such as lil Solid, lil Hybrid and lil Aible ― which KT&G has already released in Korea ― and their tobacco sticks such as Fiit, Miix and Aiim.
In particular, the two companies have added stability to their business by setting a common ground on responding flexibly to changing market conditions according to their business performance every three years. PMI guaranteed at least 16 billion tobacco stick sales from 2023 to 2025.
KT&G selected PMI as its business partner in January 2020 to export its lil products for the global market. PMI also chose KT&G as its strategic partner to further expand its portfolio of innovative products.
The two firms first launched lil in three countries including Japan and later introduced them in European countries like Italy and Greece. Now, they have advanced to 31 countries, establishing a presence in Central Asia and Central America.
"Heat-not-burn products of PMI and KT&G complement each other and provide an innovative product portfolio to more diverse consumers," PMI CEO Jacek Olczak said. "The deal underscores both companies' effort to offer better alternatives for about 1 billion smokers worldwide."
