KT&G is building a new tobacco factory in Kazakhstan with the aim of securing a strategic foothold for exports to Europe, Russia, and Central Asian nations.
KT&G announced on Oct. 12 that it held a groundbreaking ceremony for the new factory in Almaty Province, Kazakhstan, on Oct. 11, attended by CEO Baek Bok-in, Governor of Almaty Marat Sultangaziyev, and around 70 others. The newly initiated factory in Kazakhstan spans an area of 200,000 square meters, which is equivalent to 28 soccer fields. It is slightly larger than the new factory under construction in East Java Province, Indonesia, which spans 190,000 square meters. The plan is to commence operations in 2026.
The new factory will serve as a strategic foothold for exports to Europe and the Eurasian region, including the Commonwealth of Independent States (CIS) countries. KT&G aims to establish this facility as a “hybrid production base,” producing both combustible cigarettes (CC), or tobacco, and next-generation products (NGP) in the same plant. The goal is to complete construction by 2025.
KT&G’s objective is to position Kazakhstan as a cornerstone for business growth in the Eurasian region, utilizing its favorable geographical location between Europe and Asia, vast land area ranking ninth globally, and relatively low labor costs. KT&G established a local subsidiary for sales and manufacturing in Kazakhstan in January of this year, laying the foundation for local business operations. Its aim is to create an integrated local value chain, allowing it to manage everything from production to marketing and sales directly in Kazakhstan.
The establishment of the new factory in Kazakhstan is a tangible commitment to growth investment, as announced during KT&G’s “Future Vision Declaration” event in January. At that time, KT&G unveiled its medium- to long-term vision of “Global Top-tier Leap,” announcing its plans to focus on three core businesses: NGP, global CC, and health functional supplements.
The key to this strategy is to strengthen the company’s overseas direct business capabilities. It plans to increase its overseas direct business, aiming to generate over half of its total revenue from international operations. KT&G aims to elevate its global sales share to over 50 percent by 2027.