KT&G resumes heated tobacco device supply after relocation to Malaysia

KT&G CEO Bang Kyung-man delivers a speech during the opening ceremony of the company's new factory in Kazakhstan on April 22. (KT&G)

KT&G has normalized the supply of its next-generation heated tobacco device, lil Hybrid 3.0, following the relocation of its production base from Vietnam to Malaysia earlier this month.

KT&G supplier Elentec had produced the lil Hybrid 3.0 at its Hanoi plant, but operations stopped in December due to sudden regulatory changes. The disruption forced KT&G to temporarily halt domestic sales of the device in February.

By expediting the relocation process, the company has managed to restore stable distribution in Korea by early May, despite initial expectations that the supply shortfall would continue through June.

With the supply chain stabilized, KT&G is poised to reinforce its leadership in Korea’s heated tobacco market, where lil currently holds around 46 percent market share. The company remains in a close contest with Philip Morris International’s Iqos, trailing by only about one percentage point.

“The temporary supply disruption has been swiftly resolved, and as of early May, devices are once again being supplied normally in the domestic market,” a KT&G official said. “With supply now stabilized, we expect to further strengthen our leadership in the heated tobacco market.”

Meanwhile, KT&G reported strong financial results for the first quarter of 2025 on Thursday, driven by robust growth in its global combustibles business.

Revenue rose 15.4 percent year-on-year to 1.49 trillion won ($1.1 billion), while operating profit climbed 20.7 percent to 285.6 billion won. The core tobacco division saw revenue rise 15.3 percent to 988 billion won, with operating profit up 22.4 percent to 252.9 billion won, bolstered by high overseas demand.

Inside KT&G's Indonesian factory (KT&G)

KT&G’s overseas combustibles segment posted its fourth consecutive quarter of “triple growth” — in sales, operating profit and shipment volume — fueled by price increases and expanded market reach. Operating profit in the segment soared 312.5 percent year-on-year, while revenue jumped 53.9 percent to a record 449.1 billion won.

“With exchange rate volatility and domestic market challenges, our focus on profitability and global expansion has delivered strong growth in both revenue and earnings,” a KT&G official said.

Following the recent completion of a new plant in Kazakhstan and another under construction in Indonesia, KT&G expects continued momentum in its global business.