KT&G Begins Full-Scale Operations at New Indonesian Plant, Completing Its “Global Five-Point Production System”
Indonesia emerges as KT&G’s largest overseas production base, with annual cigarette production capacity expected to reach up to 35 billion sticks, further strengthening its role as an Asia-Pacific manufacturing hub, KT&G nears completion of its KRW 2.4 trillion overseas capital investment program a
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KT&G has begun full-scale operations at its new plant in Indonesia, completing its “Global Five-Point Production System.” The exterior of KT&G’s new plant in Indonesia.
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KT&G has begun full-scale operations at its new plant in Indonesia, completing its “Global Five-Point Production System.” KT&G CEO Bang Kyung-man delivers remarks at the opening ceremony for the new Indonesian plant.
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KT&G has begun full-scale operations at its new plant in Indonesia, completing its “Global Five-Point Production System.” Key attendees pose for a commemorative photograph at the plant’s opening ceremony. They include KT&G CEO Bang Kyung-man (fourth from right); Adhy Karyono, Regional Secretary of the East Java Provincial Government (fifth from right); and Yoon Soon-gu, South Korea’s Ambassador to Indonesia (fifth from left).
KT&G (CEO Bang Kyung-man) has begun full-scale operations at its new plant in Indonesia, completing its “Global Five-Point Production System” covering South Korea, Indonesia, Russia, Kazakhstan, and Türkiye.
KT&G held a ceremony on October 6 (local time) in Pasuruan, East Java to mark the opening of the new plant and the start of full-scale production. Attendees included KT&G CEO Bang Kyung-man and other company executives and employees, as well as Adhy Karyono, Regional Secretary of the East Java Provincial Government; Yoon Soon-gu, South Korea’s Ambassador to Indonesia; and other distinguished guests.
Indonesia is one of the world’s major tobacco markets and an export hub for the Asia-Pacific region. KT&G entered the market in 2011 by acquiring a local company. Since then, KT&G has introduced products including ESSE, the world’s No. 1 ultra-slim cigarette brand, and JUARA, a brand developed specifically for the Indonesian market. The company currently ranks fourth in the country by market share.
To meet steadily growing demand in Indonesia and other global markets, KT&G has pursued the construction of a new plant to complement its existing production facility in the country. The project began with the signing of a partnership agreement with Indonesia’s Ministry of Investment and Downstream Industry in September 2023. A groundbreaking ceremony followed in April 2024, and trial operations began in the first half of this year.
Now entering a stable production phase, the new plant is scheduled to operate nine cigarette manufacturing lines, with an annual production capacity of up to 21 billion sticks. On top of KT&G’s existing Indonesian plant, which has an annual capacity of 14 billion sticks, the new facility is expected to make Indonesia the company’s largest overseas production base, with a combined annual capacity of up to 35 billion sticks.
Leveraging Indonesia’s geographic advantage as a midpoint between the Pacific and Indian Oceans, the new plant will supply not only the domestic market but also international markets, including Taiwan, Mongolia, Nigeria, and India. The plant is therefore expected to serve as a key overseas export hub for KT&G, serving markets both within and beyond the Asia-Pacific region.
The construction of KT&G’s new overseas manufacturing facilities is part of the company’s growth investment initiative launched in January 2023. Following the completion of its new plant in Kazakhstan in April last year and the start of full-scale operations at its new Indonesian plant, KT&G is nearing completion of a substantial portion of the KRW 2.4 trillion overseas capital investment program it announced in November 2024. Building on its strengthened financial position, the company plans to continue pursuing sustainable improvements in shareholder value through various measures, including share repurchases, the retirement of treasury stock, and increased dividends.
Looking ahead, KT&G’s four overseas plants in Indonesia, Russia, Kazakhstan, and Türkiye are expected to have a combined maximum annual production capacity of 65 billion cigarette sticks. By achieving economies of scale and improving logistics efficiency, the company plans to increase the share of its overseas production to more than 60% by 2028.
KT&G CEO Bang Kyung-man stated, “With the opening of our new Indonesian plant, KT&G has completed its large-scale overseas capital investment program and established a Global Five-Point Production System that will provide a solid foundation for our global business and future growth. By strategically leveraging our production hubs in South Korea and overseas to maximize profitability, we will further strengthen our international business competitiveness while continuing to enhance shareholder and corporate value.”
KT&G remains committed to expanding its global footprint through active direct operations in markets worldwide. The company currently operates six overseas subsidiaries, including those in Indonesia, Taiwan, Kazakhstan, and Uzbekistan, as well as six branch offices in regions including Europe, Mongolia, and China, steadily broadening its global business presence.