KT&G Builds World's Largest Cigarette Factory in Indonesia: "35 Billion Units Annually"

140 Billion Units from Existing Factory Plus 210 Billion Units from New Facility

Indonesia Emerges as KT&G's Largest Overseas Production Hub

"Global Five-Point Production System" Connects Korea, Indonesia, Russia, Kazakhstan, and Turkiye

2.4 Trillion Won Overseas Facility Investment (CAPEX) Nears Completion

"Enhanced Financial Stability, Increased Shareholder and Corporate Value"

KT&G has established the world's largest cigarette production facility in Indonesia.

Bang Kyungman, President of KT&G (seventh from the left), Adi Kariono, Secretary General of East Java Province, Indonesia (sixth from the left), and Yoon Soongoo, Ambassador of the Korean Embassy in Indonesia (fifth from the left) are posing for a commemorative photo at the KT&G Indonesia new factory opening ceremony held on the 6th (local time) in Pasuruan, East Java Province, Indonesia. Photo by KT&G

According to KT&G on October 7, the company held an opening ceremony for its new factory in Pasuruan, East Java Province, Indonesia, on October 6 (local time) to mark the official start of production. The event was attended by key figures including Bang Kyungman, President of KT&G, Adhy Karyono, Secretary-General of East Java Provincial Government, and Yoon Soongu, Ambassador of the Korean Embassy in Indonesia, along with other executives and employees.

Indonesia is one of the world's major tobacco markets and serves as an export hub for the Asia-Pacific region. KT&G first entered the Indonesian market in 2011 by acquiring a local company. Since then, KT&G has launched the global No. 1 ultrathin brand "ESSE" and the Indonesia-exclusive brand "JUARA," currently holding the fourth highest market share in the country.

Aerial view of KT&G's new factory in Indonesia. Provided by KT&G

To meet the steadily increasing local and global demand, KT&G has promoted the construction of a new factory in addition to its existing Factory 1 in Indonesia. Following a signing ceremony with the Indonesian Investment Ministry in September 2023, construction of the new production facility began in April the following year, with trial operation starting in the first half of this year.

Now in a stable production phase, the new Indonesian factory will be equipped with nine cigarette manufacturing lines, enabling annual production of up to 21 billion cigarette units. By adding the new factory's capacity to the existing factory's 14 billion-unit annual production, Indonesia will become KT&G's largest overseas production base, able to produce up to 35 billion cigarette units annually.

Leveraging Indonesia's strategic geographic location between the Pacific and Indian Oceans, cigarettes produced at the new factory will not only supply the domestic Indonesian market but will also be exported to countries such as Taiwan, Mongolia, Nigeria, and India. In the future, KT&G's overseas factories in four countries—Indonesia, Russia, Kazakhstan, and Turkiye—are expected to reach a combined annual production capacity of 65 billion cigarette units. The company plans to leverage this production scale and improve logistics efficiency to raise its overseas production ratio to over 60% by 2028.

Kyungman Bang, President of KT&G, is delivering a greeting speech at the KT&G Indonesia new factory opening ceremony held on the 6th (local time) in Pasuruan, East Java Province, Indonesia. Provided by KT&G

The establishment of KT&G's new overseas factories is part of a growth investment initiative that began in January 2023. Following the completion of the Kazakhstan factory in April last year, the commencement of full-scale operations at the Indonesian factory has enabled KT&G to largely fulfill its overseas facility investment (CAPEX) plan of 2.4 trillion won announced in November 2024. As a result, KT&G has completed its "global five-point production system," spanning Korea, Indonesia, Russia, Kazakhstan, and Turkiye.

Bang Kyungman, President of KT&G, stated, "With the new factory in Indonesia, KT&G has completed its large-scale overseas facility investment and established a 'global five-point production system,' which will serve as a solid foundation for future global business and growth. We will strategically utilize our production bases in various countries to maximize profitability and further enhance global business competitiveness, continuously increasing shareholder and corporate value."

This content was produced with the assistance of AI translation services.