KT&G to Build Second Factory in Indonesia

KT&G Corp. plans to expand its production facilities in Indonesia, reports the Yonhap News Agency.

The South Korean tobacco company currently operates a factory in Surabaya and plans to build a second one in the Southeast Asian country. The new plant will produce KT&G products for export to neighboring and other countries.

Indonesia’s government is supporting the investment, according to KT&G.

The expansion fits into KT&G’s ambition to earn half of its sales from overseas businesses in 2027. It aims to achieve sales of KRW10 trillion ($7.53 billion) in 2027, compared with KRW5.9 trillion in 2022.

In addition to producing conventional cigarettes, KT&G said it will reinforce its heat-not-burn (HNB) and health functional food product businesses. 

The company has exported its HNB products to more than 30 countries since 2020 through the distribution deal with Philip Morris International.

Currently, KT&G earns 90 percent of its overall sales from the cigarette business division and the 10 percent from the HNB division.

The company 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.