KT&G has launched comprehensive operations at its new factory in Indonesia, finalizing a global production network that includes South Korea, Indonesia, Russia, Kazakhstan, and Türkiye.
To celebrate the commencement of large-scale production, KT&G conducted an opening ceremony at the newly inaugurated plant in Pasuruan, East Java.
Attending the event were CEO Bang Kyung-man, KT&G executives and staff, Adhy Karyono, East Java Province's Regional Secretary, Yoon Soon-goo, the Ambassador of the Republic of Korea to Indonesia, among other esteemed guests.
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Indonesia ranks among the leading tobacco markets globally and serves as a key export center for the Asia-Pacific area. KT&G initially entered the Indonesian market in 2011 by acquiring a domestic firm. Since that time, the company has introduced ESSE, its market-leading ultra-slim cigarette brand, and JUARA, a brand tailored for Indonesia, which now holds the fourth position in Indonesia's cigarette market by market share.
To address the increasing demand in Indonesia and international markets, KT&G has established a new factory next to its current one. After reaching an agreement with Indonesia's Ministry of Investment/Investment Coordinating Board (BKPM) in September 2023, the company commenced construction on the new facility in April 2024 and started trial operations in the first half of 2026.
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The new facility has now commenced consistent production. After the installation of all nine cigarette manufacturing lines, it will possess an annual production capacity of as much as 21 billion sticks. Along with the current plant's yearly output of 14 billion sticks, KT&G's overall cigarette manufacturing capacity in Indonesia is anticipated to hit 35 billion sticks, positioning Indonesia as the company's biggest international production hub.
Utilizing Indonesia's advantageous position between the Indian and Pacific Oceans, cigarettes made at the new facility will be distributed to the local market as well as international markets such as Taiwan, Mongolia, Nigeria, and India.
The new facility is anticipated to function as a vital export center, assisting KT&G's growth throughout the Asia-Pacific area and various international markets.
The establishment of KT&G's new international facilities is a component of the growth investment initiative the firm initiated in January 2023. After finishing its new facility in Kazakhstan in April 2025 and launching full operations at the new plant in Indonesia, KT&G has accomplished a large part of its previously declared KRW 2.4 trillion overseas capital investment plan, revealed in November 2024. Supported by bolstered financial stability, the firm will persist in boosting shareholder value through share repurchases and cancellations, along with higher dividend distributions.
In the future, KT&G's four international manufacturing facilities located in Indonesia, Russia, Kazakhstan, and Türkiye are projected to achieve a total annual production capability of as much as 65 billion sticks. Utilizing economies of scale and enhancing logistics efficiency, the company aims to boost the share of international production to over 60 percent of its overall production by 2028.
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Bang Kyung-man, CEO of KT&G says, "With the new plant in Indonesia as the final piece, KT&G has completed its large-scale overseas investment program and established a five-country global production system that will serve as a solid foundation for our global business and future growth. By strategically leveraging our production bases in Korea and overseas, we will maximize profitability, strengthen the competitiveness of our global business, and continue to increase shareholder and corporate value."
KT&G keeps broadening its direct footprint in international markets. The company currently has six international subsidiaries in nations such as Indonesia, Taiwan, Kazakhstan, and Uzbekistan, along with six foreign branch offices in areas like Europe, Mongolia, and China.