Due to policy changes in Vietnam. KT&G has relocated the production base of its heating non-combustion equipment “Lil Hybrid 3.0” from Vietnam to Malaysia. Previously, the production halt at the factory in Vietnam led to supply disruptions, forcing KT&G to suspend sales. However, with the completion of the relocation of the production base, supply has returned to normal at the beginning of this month. Currently, KT&G’s “lil” series has a market share of approximately 46% in South Korea, leading the “iQOS” of Philip Morris International.
Key points:
- KT&G, a South Korean tobacco company, has relocated its production base for heating non-combustible equipment from Vietnam to Malaysia.
- Due to production disruptions caused by policy changes in Vietnam, KT&G once suspended the sales of “Lil Hybrid 3.0”.
- After the relocation of the production base, the supply issue was resolved at the beginning of this month.
- After the supply is restored. KT&G is expected to consolidate its leading position in the heating non-combustible market in South Korea.
- Currently, KT&G’s “lil” series has a market share of approximately 46% in the South Korean market, leading the “iQOS” of Philip Morris International.
Korea Tobacco relocates HTP equipment production base to Malaysia
According to News1’s report on May 9th. South Korean tobacco KT&G has moved the production base of its heated non-combustible equipment “Lil Hybrid 3.0” from Vietnam to Malaysia and resumed normal supply at the beginning of this month.
KT&G’s heating non-combustion equipment production subsidiary previously had a factory in Hanoi, Vietnam. However, due to the Vietnamese government’s sudden notice of factory closure in December last year without setting a transition period, production was disrupted and supply became unstable. This policy change led KT&G to suspend the sales of “lil Hybrid 3.0” in sales channels such as convenience stores in February.
Although it was initially expected that the supply problem would persist until the end of next month, KT&G accelerated the pace of factory relocation and eventually resumed the supply and circulation of equipment in the South Korean market at the beginning of this month.
With the resolution of supply issues. KT&G is expected to further consolidate its leading position in the South Korean heated non-combustible market in the second half of the year. At present, the “lil” series has a market share of approximately 46% in South Korea, ranking first. It is in fierce competition with the “iQOS” product of Philip Morris International (PMI), and the gap in market share between the two is only about 1%.
A person related to KT&G said,
- “The supply issues caused by policy changes in Vietnam are being resolved rapidly, and products have resumed supply since the beginning of this month. With the normalization of supply, we expect to further consolidate our leading position in the heated non-combustion field.”
