KT&G is establishing a branch office in Guatemala to strengthen its presence in the Latin American market. The South Korean tobacco company is shifting from indirect exports through importers to directly managing local distribution networks. This move comes as overseas cigarette sales surpassed domestic revenue for the first time last year.
According to industry sources on May 9, KT&G approved plans to establish the Guatemala branch at its management committee meeting in November last year and is currently proceeding with related procedures. The company plans to use the branch to strengthen local sales activities, including distribution network management, sales channel monitoring, market research, and price competitiveness and marketing assessments.
"We are in the preparatory stage for establishing the branch, including reviewing office locations, staffing structure, local hiring plans, and branch operation design," a KT&G official said. "Specific details such as the branch location and staff size have not yet been finalized."
The Guatemala branch marks KT&G's first outpost in the Americas region. The company currently operates branches in 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 Turkey, Indonesia, Kazakhstan, and Russia. However, operations at its U.S. subsidiary are currently suspended. In the Americas, the company has relied on exporters, resulting in multi-layered distribution structures that limited 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 Guatemala before expanding operations to neighboring countries. The company aims to establish a foothold for directly managing local distribution networks, enabling more precise 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 of 1.5921 trillion won for the first time. Overseas cigarette sales surged 29.4% year-on-year, driving overall performance improvement. Total revenue and operating profit rose 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 increased from 53.15 billion sticks in 2023 to 58.65 billion in 2024 and 65.22 billion in 2025. However, the combined share of the Americas and European markets edged up from 21.3% in 2023 to 22.6% in 2024, before declining to 22.1% last year, indicating sluggish growth. The Guatemala branch aims to boost Latin American sales.
KT&G has set management targets for this year of 3-5% revenue growth, 6-8% operating profit growth, and a total shareholder return ratio exceeding 100%. Following the completion of its Kazakhstan plant last year, the company will begin operations at a new Indonesian factory in the first half of this year to expand overseas production bases. It also plans to diversify its product lineup through ASF, a Swedish nicotine pouch company it acquired stakes in last year.
"With overseas sales expanding rapidly, securing a distribution base in Latin America is expected to add momentum to KT&G's global business expansion strategy," an industry official said.
