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우리담배 사장 홍원기(경희대) 2월 20일자 Korea Times 기사

이기현 10 843 2008.02.20 18:32

02-19-2008 17:50

New Cigarette Maker Aims to Break 4-Way Competition

Woori Tobacco President Hong Won-kie

By Jane Han
Staff Reporter

Woori Tobacco ― the first local licensed cigarette maker funded with private capital ― kicked off business last month, claiming it has what it takes to challenge the overwhelming lead of the market's No. 1 player, KT&G.

``Advanced filters, customized production and localized marketing are three standout characters that differentiate us from our competitors,'' Hong Won-kie, the company president, said in a Korea Times interview Tuesday.

The manufacturer, which won last year a government license to produce and sell cigarettes, rolled out two flagship brands, Wigo and Swing, in mid-January for domestic and overseas sales.

He explained that Woori Tobacco uses DNA filters in all of its products, as they are known to reduce fatal substances such as dioxin and benzopyrene from passing through.

``Smoking is bad, however, for those who can't help but light up can at least enjoy a less-harmful version,'' he said.

Hong added that the company's marketing keyword is ``localization,'' explaining that it will run some 250 regional offices to oversee local sales.

``Instead of the Seoul headquarters trying to market the brand, we're establishing a regional network that's more personal, as it will help us connect better with consumers,'' he said. ``That will eventually give us an edge over our contenders.''

Currently, KT&G, the former state-run monopoly, takes the lead with about a 70 percent market share, followed by British American Tobacco, Philip Morris and Japanese Tobacco. Market research shows that although the number of smokers is declining, the volume of cigarette sales is increasing, mainly due to the reduced amount of tar.

Hong stressed that international marketing will simultaneously occur, adding that the company already secured deals worth $26 million with distributors in the United States, Australia, Vietnam, the Philippines and Mongolia.

The company's target revenue for this year is 100 billion won and it aims to take up 3 percent of the domestic market share, he said.

``Some people asked how all of this is suddenly happening when Woori launched just a month ago,'' said Hong. ``But we've been meeting with buyers since two years ago, and it's now time to harvest.''

On concerns about promoting awareness of cigarette smoking, Hong said it is planning to participate in industry-wide campaigns to help children understand the dangers of smoking.

But he said Woori will focus more on giving back to the society, by donating funds to regional governments to build town centers and public recreation facilities.

``Many eyes are on us because we're the first private, local cigarette maker to open business, but we have every intention to fulfill the public's expectations,'' said Hong.

Since 2001, the Korean government grants cigarette manufacturing licenses to businesses that meet conditions, including capital of more than 30 billion won and an annual production capacity of at least 5 billion cigarettes.

jhan@koreatimes.co.kr