20th Anniversary of KT&G Privatization... Equipped with 'Young DNA'

KT&G Marks 20th Anniversary of Privatization, Steps Up as a 'Young Company'
Strengthening 'Sangsang Junior Board' with Participation from MZ Generation Employees
Startup Support to Discover and Nurture Young Entrepreneurs
Social Contribution Projects Worth 1 Billion Won to Continue Until Year-End

KT&G 20th Anniversary of Privatization CI/Photo by KT&G

[Asia Economy Reporter Song Seung-yoon] KT&G, celebrating the 20th anniversary of its privatization this year, has expressed its ambition to transform into a global leading company equipped with a 'young DNA.'

KT&G was listed on the Korea Exchange in October 1999 under its former name, Korea Tobacco & Ginseng Corporation, following the government's 'public enterprise privatization plan' in 1998. After the government sold its shares, Korea Tobacco & Ginseng Corporation changed its name to KT&G in December 2002 and entered a fully privatized system.

With privatization, the monopoly on tobacco manufacturing was abolished, and a full-fledged competitive system was introduced. As an environment was created for autonomous efforts to secure self-sustainability, KT&G introduced a brand manager system and focused investments on research and development (R&D) to develop global-level brands, establishing KT&G's unique brands that highlight the distinctive characteristics of products such as Esse and Bohem.

KT&G overcame the onslaught of foreign tobacco products and continued to increase its market share, reaching 59.6% in 2011, 62% in 2012, 61.7% in 2013, and 62.3% in 2014. Since privatization, the domestic market share of general cigarettes has also increased to about 65%.

The upward trend continued overseas as well. KT&G, which declared a vision to grow into a 'Global Top 4 Tobacco Company' by 2025, strengthened its core markets such as the Middle East and targeted high-growth emerging markets like Latin America and Africa with locally customized products. As a result, the number of countries exporting tobacco expanded from about 50 in 2017 to 124 currently, and the heated tobacco product 'Lil,' launched in 2017, has entered 22 countries as of last year.

KT&G's sales increased by 161%, from 2.0306 trillion KRW in 2002 to 5.3016 trillion KRW in 2020. Operating profit also rose by 129%, from 586.3 billion KRW to 1.3414 trillion KRW during the same period.

Baek Bok-in, President of KT&G (third from the left), and the next-generation leader council 'Sangsang Junior Board,' composed of young employees, are discussing directions for improving organizational culture. Photo by KT&G

Marking the 20th anniversary of privatization, KT&G plans to transform its image with the goal of becoming a 'young company.' First, it is expected to strengthen the ‘Sangsang Junior Board’ activities, where MZ generation employees directly propose ideas to the CEO. KT&G launched the Sangsang Junior Board in May last year, led by MZ generation employees, to actively reflect young employees' opinions in management activities.

Through supporting youth entrepreneurship, KT&G is also promoting coexistence with youth, a key pillar of the 20th anniversary of privatization. Since 2017, KT&G has operated the ‘Sangsang Startup Camp,’ a program to discover and nurture prospective entrepreneurs, creating a virtuous cycle that solves social problems and generates youth jobs. In 2020, KT&G opened ‘Sangsang Planet,’ a dedicated youth startup space in Seongsu-dong Social Venture Valley, equipped with 128 designated seats and 24 independent offices to help entrepreneurs grow and communicate.

Various social contribution events commemorating the 20th anniversary of privatization are also planned. KT&G plans to donate 250 million KRW to support self-reliant youth, helping them establish an economic foundation and emotional stability. Self-reliant youth refers to young people who have lived in child care facilities or foster families due to the absence of guardians and are excluded from facility protection upon turning 18. In addition, KT&G will sequentially carry out social contribution projects worth about 1 billion KRW by the end of the year to commemorate the 20th anniversary of privatization.

A KT&G official said, "The slogan for the 20th anniversary of privatization, leading the global market with young and dynamic DNA, is the blueprint for the company’s direction over the next 20 years," adding, "We will not neglect efforts to transform into a young organization and strengthen global capabilities."

This content was produced with the assistance of AI translation services.