On Monday, KT&G Corp., South Korea’s leading tobacco company, declared its intention to expand its production facilities in Indonesia, aiming to inaugurate operations in 2026.
KT&G currently possesses a tobacco manufacturing plant in Surabaya and plans to construct an additional one in the Southeast Asian nation.
The new Indonesian plant will be KT&G’s “manufacturing base” in Southeast Asia for exportation to neighboring and other countries, the firm stated in a press release.
The Indonesian government said it will provide total convenience and assistance for the investment project, the statement said.
KT&G stated the magnitude of investment and other details will be decided later and all investment-related decisions will be put up for vote by the company’s board.
The Korean tobacco firm intends to generate half of its sales from overseas businesses in 2027. It aims to attain sales of 10 trillion won in 2027, compared with 5.9 trillion won in 2022.
While emphasizing on the conventional cigarette business, the company stated it will reinforce its heat-not-burn (HNB) and health functional food product businesses.
HNB products are electronic devices that, unlike e-cigarettes, contain tobacco. The tobacco is heated to a high temperature without setting it alight and creating smoke that the user inhales.
KT&G has exported its HNB products to more than 30 countries since 2020 through the sales networks of the New York-based PMI.
The company earns 90 percent of its overall sales from the cigarette business division and the remaining 10 percent from the HNB division.
KT&G has four tobacco manufacturing plants, one each in South Korea, Russia, Turkey and Indonesia, whose combined capacity amounts to 13.6 billion cigarettes a year.
This file photo provided by KT&G shows its plant in Surabaya, Indonesia. (PHOTO NOT FOR SALE) (Yonhap)
kyongae.choi@yna.co.kr
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