British American Tobacco plans £58m plant

British American Tobacco, the world’s second biggest cigarette maker, said today it will build a cigarette manufacturing plant in South Korea.

The London-based firm is the first foreign cigarette maker to invest in South Korea after the Government abandoned its decades-old monopoly on tobacco manufacturing, effective July 1.

Until last month, cigarette manufacturing in South Korea had been monopolised by the state-run Korea Tobacco & Ginseng Corp.

British American Tobacco plans to invest £58m to build the factory capable of producing 400 million packs a year in Sacheon City on the central south coast.

Construction will be finished by 2003, the company said.

‘‘We always wanted to put down roots, commit to society and to give something back to the Korean people,’’ John Taylor, president of BAT Korea said in a news release.

The plant is part of the company’s 10-year plan to invest a total of £776m in South Korea.

When the investment is completed, BAT’S Korea operation will have over 1,000 locally hired employees, it said.

South Korea’s cigarette market totals about 5 billion packs a year. The country opened its cigarette market in 1988 and foreign brands had market share of 14.6% last year.

British American Tobacco sells Dunhill, Kent, Kool, and Finesse brands in South Korea and its market share is 3.6%.

About 30% of South Korea’s 46 million people smoke an average of one pack a day, according to government statistics.

Philip Morris of the United States is the world’s largest cigarette company.