KT&G’s second production plant in Indonesia will be integral to its overseas business. Photo credit: KT&G
KT&G is planning another tobacco manufacturing facility in Indonesia, with an aim to start operations in 2026, reports Yonhap News Agency. The company already has a facility in Surabaya.
In a statement, KT&G said the new plant will serve as the company’s manufacturing base in Southeast Asia for exports to neighboring and other countries. The statement added that the Indonesian government will provide all-out convenience and support for this project. The scale of investment and other details will be decided later, according to KT&G, and all investment-related decisions will be put to a vote by the company's board.
KT&G aims to generate half of its sales revenue from overseas business by 2027, targeting to achieve KRW10 trillion (US$7.55 billion), compared to its 2022 sales of KRW 5.9 trillion (US$4.4 billion).
The company stated it will strengthen its heat-not-burn (HNB) and health functional food product businesses while focusing on its conventional cigarette business.
KT&G’s cigarette business contributes 90% of its overall sales, with the remaining 10% coming form HNB. Since 2020, the company has exported its HNB products to over 30 countries through its agreement with Philip Morris International (PMI).
KT&G currently has four tobacco manufacturing plants in South Korea, Russia, Turkey, and Indonesia, with a combined production capacity of 13.6 billion cigarettes per year.