Growth of China’s luxury market seen as opportunity for Indonesian cigar tobacco

An Indonesian company looking to boost its non-sugar revenues sees cigar tobacco as its ticket into the Chinese market for luxury goods, according to a story in The Jakarta Globe.

Perkebunan Nusantara X (PTPN X), which is the country’s largest sugar producer, spotted an opportunity to expand its tobacco arm after exports were 44 percent above target during the most recent quarter.

The state-owned company sold 634 tons of unmanufactured tobacco overseas during the second quarter and expects its annual export of unmanufactured tobacco to be worth RP296 billion ($29 million).

M. Cholidi, corporate secretary at PTPN X, said in a statement on Friday that the company was focusing on producing Besuki Na Oogst, a type of tobacco that was ideal for cigar making. The cigar market was relatively unaffected by worldwide anti-smoking campaigns, Cholidi said.

PTPN X’s biggest markets for tobacco were countries of Europe and the U.S., but it continued to seek out new markets.

And one of those is China, where a rising affluent class had boosted demand for high-quality cigars.

PTPN X is expanding its tobacco plantations accordingly. The company’s growing area under tobacco reached 1,296 hectares at the end of June, up 17 percent from that of last year.