The global tobacco industry, long shaped by a small group of U.S. and European companies, is beginning to reflect a broader redistribution of power as KT&G, South Korea’s dominant tobacco and nicotine-products manufacturer, climbs to seventh place worldwide by market capitalization, highlighting how growth in the sector is increasingly coming from outside its traditional centers.
KT&G’s rise places it alongside companies such as Philip Morris International, British American Tobacco and Altria, according to data compiled by CompaniesMarketCap. For an industry historically dominated by Western multinationals, the entry of a Korean producer into the top tier underscores how geographic and strategic diversification is reshaping competition.
The company’s valuation has been driven primarily by overseas expansion rather than its domestic market. Through the third quarter of last year, KT&G reported consolidated revenue of about $3.3 billion, up nearly 12 percent from a year earlier, with export sales growing at more than twice that pace. Full-year revenue is expected to exceed $4.4 billion, pushing the company into a revenue bracket typically occupied by established global players.
KT&G has taken a markedly different approach from many Western peers that are rapidly pivoting away from combustible cigarettes. In Central Asia and Southeast Asia, the company has continued to scale conventional cigarette production through local manufacturing and distribution, targeting markets where demand remains resilient. In more mature economies, including parts of Europe and the U.S., it has emphasized non-combustible alternatives, led by its lil heated-tobacco products.
New production capacity has played a central role in that strategy. Facilities in Kazakhstan and Indonesia have lowered logistics costs and improved margins, while rising utilization rates have supported profitability even as global pricing pressure intensifies. Additional factories in Indonesia are scheduled to come online this year, reinforcing KT&G’s position in one of the world’s fastest-growing tobacco markets.
The expansion comes as the global industry confronts structural decline in smoking rates, forcing companies to seek growth through alternative nicotine formats. KT&G has moved into that space cautiously but deliberately, adding nicotine pouches and other smoke-free products while maintaining its legacy cigarette business where economics remain favorable.
A key step in that effort was a joint acquisition with Altria of a Nordic nicotine pouch producer, ASF, giving KT&G exposure to a category that has become strategically important for U.S. and European tobacco companies. Earnings from the investment are expected to begin contributing this year, strengthening the company’s position in reduced-risk products without requiring a wholesale shift away from combustibles.
Analysts see KT&G’s trajectory as evidence that competitive pressure in the global nicotine market is widening beyond its traditional core. Revenue is projected to move toward the upper $4 billion range over the medium term, placing the company within close range of established second-tier global players and narrowing the gap with long-dominant incumbents.
For an industry once defined by a stable hierarchy of Western multinationals, KT&G’s ascent illustrates how emerging-market manufacturers are gaining relevance through cost discipline, localized strategies and selective investment in next-generation products. As demand fragments across regions and nicotine formats, the balance of power in global tobacco is becoming less predictable—and less exclusively Western.
