KT&G signs $1.8b deal with UAE consumer giant

KT&G said Thursday it signed a 2.2 trillion won ($1.8 billion) contract with Dubai-based consumer giant Alokozay for a period of seven years and four months.

This is the South Korean tobacco company’s second global collaboration this year following the supply deal signed with Philip Morris International on Jan. 29 to export the firm’s e-cigarettes globally for the next three years.

KT&G said through the deal, it “cleared uncertainties in major overseas markets, which have stalled over the past two years due to an unstable situation in the Middle East and soaring foreign exchange rates.”

The company noted that having a clause that requires a minimum purchase quantity allows for long-term stable revenue and minimizes risks in the main market.

KT&G is targeting overseas markets to create a balanced business portfolio in Korea and abroad, with the aim of becoming a global “Big Four” company by 2025. The firm plans to expand overseas, from the current 80 countries to 100 countries, this year.

By Shin Ji-hye (shinjh@heraldcorp.com)