KT&G Establishes Guatemala Branch as Gateway to Latin America

KT&G has initiated the establishment of a branch office in Guatemala to strengthen its presence in the Latin American market. The move marks a strategic shift from indirect exports through importers to directly managing local distribution networks. This comes as the company's overseas cigarette sales surpassed domestic sales for the first time last year, accelerating its global business expansion.

According to industry sources on May 8, KT&G approved the Guatemala branch establishment plan at its management committee meeting in November last year and is currently proceeding with related procedures. The company plans to strengthen local business activities including distribution network management, sales channel oversight, market research, and monitoring of price competitiveness and marketing.

"We are in the preparatory stage for establishing the branch, including reviewing office locations, organizing personnel, establishing local hiring plans, and designing the branch operation structure," a KT&G official said. "Details such as the branch location and staff size have not yet been finalized."

The Guatemala branch is significant as KT&G's first branch office in the Americas. The company currently operates branches in Europe (Romania), Kyrgyzstan, Mongolia, China, and Tajikistan, with sales subsidiaries in Kazakhstan, Russia, Indonesia, Uzbekistan, Taiwan, and the United States. It also runs manufacturing subsidiaries in Türkiye, Indonesia, Kazakhstan, and Russia. However, operations at the U.S. subsidiary have been temporarily suspended. In the Americas region, distribution through importers often involves multiple layers, limiting sales channel management.

The new Guatemala branch is expected to serve as a forward base for penetrating the Latin American market. Industry observers expect KT&G to initially focus on the Guatemalan market before expanding to neighboring countries. The strategy aims to establish a foothold for directly managing local distribution networks, enabling more detailed sales channel management and improved market responsiveness.

Last year, KT&G's overseas cigarette sales reached 1.8775 trillion won, accounting for 54.1% of total cigarette revenue and surpassing domestic sales (1.5921 trillion won) for the first time. Overseas cigarette sales surged 29.4% year-over-year, driving overall performance improvement. Total revenue and operating profit increased 11.4% and 13.5% respectively to 6.5796 trillion won and 1.3495 trillion won, marking record-high sales for the second consecutive year.

Overseas cigarette sales volume grew from 53.15 billion sticks in 2023 to 58.65 billion in 2024 and 65.22 billion in 2025. However, the Americas and European market share showed sluggish growth, rising from 21.3% in 2023 to 22.6% in 2024 before declining to 22.1% last year. The Guatemala branch establishment aims to boost Latin American sales.

KT&G has set management targets for this year including 3-5% revenue growth, 6-8% operating profit growth, and total shareholder return ratio of 100% or higher. Following the completion of its Kazakhstan factory last year, the company will begin operating a new Indonesian plant in the first half of this year to expand overseas production bases. It also plans to expand its product lineup through ASF, a Swedish nicotine pouch company whose stake it acquired last year.

"With overseas sales rapidly expanding, securing a distribution base in Latin America is expected to add momentum to KT&G's global business expansion strategy," an industry official said.