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Wednesday, 8 August, 2001, 06:44 GMT 07:44 UK
BAT lights up South Korea
Man smoking
South Koreans smoke over 5bn packets a year
British American Tobacco (BAT), the world's second largest tobacco group, has become the first foreign cigarette maker to break into South Korea's newly deregulated manufacturing market.

BAT said on Wednesday it would invest 1.4 trillion won ($1.10bn) over 10 years, starting with a $82m factory capable of producing 400m packs a year in Sacheon City on the central south coast.

The South Korean government abolished the manufacturing monopoly of state-run Korea Tobacco & Ginseng Corp and introduced import duties on 1 July.

"We always wanted to put down roots, commit to society and to give something back to the Korean people," John Taylor, president of BAT Korea said in a news release about the new factory.

About 30% of South Korea's 46m people smoke an average of one pack a day, or approximately 5bn packets a year, according to government statistics.

"The ultimate goal of BAT is to become the number one tobacco company in Korea, whilst being known and recognised for its responsible policies," BAT said in a statement.

Market share

Foreign brands have taken about 14.6% of the South Korean market since it was open to competition in 1988.

London-based BAT, whose brands include Dunhill, Lucky Strike, Kent, Pall Mall, and Kool has a market share of 3.6% in South Korea with sales of 300bn won last year.

South Korea has imposed import duties of 40% percent on foreign cigarettes over the next four years to weaken their price advantage.

BAT manufactures in 66 countries making over 300 brands and has a global market share of 15.4%, the company said.

See also:

28 Feb 01 | Business
Tobacco firm repackages itself
12 Apr 01 | Business
The 1bn profit club
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