KTI: Independent & Successful

Features

In the highly competitive segment of cigarette manufacturing, Bulgaria’s KT International (KTI) is the country’s most successful independent cigarette company.

KTI: building success on king and corset

The beautiful southern Bulgaria city of Plovdiv is home to KT International (KTI). After the surprising demise (and later privatization) of the former state monopoly BulgarTabac a few years back, KTI can today safely be considered the Balkan country’s largest and certainly internationally most successful independent cigarette company. KTI primarily focuses on only two main brands –The King and Corset – according to Stuart Buchanan, KTI’s global marketing director.

“The King and Corset are our main cigarette brands and 100% proprietary,” he says, but doesn’t fail to mention that KTI also offers other brands. However, they are not particularly aggressively pushed, while both The King and Corset come in a broad variety of formats, from KS and QS to 100s, slims, super slim, and nano.

Focused on export

KTI is a very export-oriented outfit. Its home market of Bulgaria presently accounts for only around 20% of the company’s annual volume turnover across all its brands. The other 80% go abroad, mostly to other European countries. Among the company’s current key markets are France, the Czech Republic, and Spain, in all of which KTI established its market presence only in 2013, while Italy was added in 2014. Although KTI engages in some minor OEM manufacturing, Buchanan prefers not to disclose the clients and volumes involved. But he also acknowledges that existing OEM customers value KTI for its reliable manufacturing quality and strong customer service.

“Being based in the European Union and subject to EU regulations for manufacturing tobacco products, [OEM] customers see this as a commitment to quality and customer service,” said Buchanan. But, he adds that “in the end, KTI is focusing on growing its own global brand portfolio.” And business has been good. Since 2017, KTI consistently enjoys annual volume growth figures of well above 30%.

Dedication overcomes challenges

But KTI initially found it difficult to break into markets.

“Our main challenge revolved around the reluctance of major operators – both domestic and travel retail – to accept new companies outside the big multinationals,” Buchanan recalls. “However, based on our track record of consistent growth, ongoing consumer innovation, and a philosophy of  excellent customer service we are now becoming a partner of choice in many markets.” Yet despite that rosy outlook, KTI “obviously has markets where we have been less successful with lower growth rates,” Buchanan admits. “But through ongoing portfolio and strategy modification, we generally work through these issues.”

In this sense, KTI engages in careful advance planning to determine which markets the company would like to enter, subsequently adapting its marketing strategy accordingly. “Italy is a good example, which thanks to ongoing strategy optimization and working with our domestic partners has now become one of our fastest-growing markets globally,” Buchanan points out.

The most modern factory in the EU

With regards to its manufacturing capabilities, Buchanan insists that KTI’s factory “is arguably the newest and most modern in the European Union.” And being located in Bulgaria, the plant benefits from excellent local technical capabilities, well-trained personnel, and an effective cost base with European Union quality standards.

“Our annual capacity is more than 30 billion sticks depending on format utilization,” asserts Buchanan. He adds that KTI’s commitment to innovation and consumer quality also means that machinery is constantly upgraded. He cites the Corset shell pack as an example, explaining that it is “the world’s first pack in this format.” Introducing it “was the culmination of three years of work and a multi-million euro investment with one of Europe’s leading machine manufacturers.”

To meet growing capacity, KTI currently is in the process of implementing another three production lines in new formats.