BAT targets South Korea for expansion drive

British American Tobacco, the world's second-largest cigarette maker, announced plans yesterday to boost its presence in South Korea.

The company launched its first locally produced Dunhill brands in the country, where it accounts for 12 per cent of all domestic cigarette sales but has ambitions to capture a further 8 per cent by 2006. The market is a potentially lucrative one, with 13 million, out of a population of 47 million, who smoke.

John Taylor, who heads up BAT in Korea, warned, however, that the market is unlikely to grow. He said anti-smoking campaigns will ultimately limit the potential to attract new customers, and so the company must lure smokers away from their current brands to increase market share.

BAT was until recently, along with all other foreign companies, forbidden from manufacturing its cigarettes in South Korea. However, with a lifting of restrictions in June 2001, the company invested £70m in building a factory in the country, enabling it to avoid import duties and the costs associated with importing its products from the UK.