Tag: Sampoerna

Sampoerna Profit Dips

Photo: Sampoerna
Sampoerna sold 39.9 billion cigarettes in the first semester of 2024, 3 percent less than in the comparable 2023 semester. Net income increased 3 percent to IDR57.8 trillion, but net profit was down 11.6 percent to IDR 3.3 trillion.
Sampoerna President Director Ivan Cahyadi cited a challenging operating environment. “Although economic growth is relatively stable, the purchasing power of adult consumers tends to weaken,” he said in a statement. “The challenges of the tobacco industry are also added by the pressure of double-digit excise rate increases far above the inflation rate, and the widening gap in excise rates between segments.”
Rising taxes combined with declining consumer purchasing power has prompted many Indonesian smokers to shift to lower-taxed cigarettes or illicit offerings. According to Sampoerna, the “Below Volume Tier 1” segment has doubled since 2017 to claim 44 percent of the cigarette market.
“Moving forward, we hope that the government continues to issue a multi-year tobacco excise policy based on clear economic parameters, like inflation rates, as well as considering adult consumers’ purchasing power, to create a conducive and sustainable business and investment climate combined with the continuous effort to combat illicit cigarettes,” said Cahyadi.
“In addition, the government is also hoped to continue implementing policies that will support the continuity of the labor-intensive segment such as hand-rolled kretek cigarette (SKT) and halt the acceleration of downtrading to optimize government revenue from tobacco excise.”
Cahyadi also emphasized the importance of a balanced excise policy based on risk profiles to support innovation in the tobacco industry.
In 2023, Sampoerna invested more than $300 million in smoke-free products factory in Karawang, West Java.
Earlier this year, the company opened third-party operator factories in Jaten, Central Java and Dander, East Java.
Throughout the first semester of 2024, Sampoerna employed, directly and indirectly, more than 90,000 people, of which around 90 percent are working in the labor-intensive SKT segment.
August 1, 2024
New Sampoerna Boss: Workforce has Value
Ivan Cahyadi
(Photo: Sampoerna)
Ivan Cahyadi, the new president director of Sampoerna, emphasized the company’s commitment to human capital development during a May 14 media meeting reported by The Jakarta Post.
Celebrating its 111th anniversary, Sampoerna prioritizes human capital as crucial for business sustainability and societal well-being in Indonesia. Cahyadi, who began his career at Sampoerna in 1996, credits the company’s development programs for his rise to leadership. Sampoerna’s policy of job rotation and training across various departments enabled him to understand the business comprehensively.
Sampoerna’s human capital initiatives include job rotation, overseas assignments and training, fostering an inclusive environment irrespective of ethnic or cultural backgrounds, according to Cahyadi. This approach has positioned Indonesians among global scientists and experts in innovative tobacco products. The company also operates advanced laboratories in Karawang and Pasuruan, enhancing local talent’s potential.
Cahyadi highlighted Sampoerna’s support for traditional retailers through the Sampoerna Retail Community program, which aids 250,000 micro, small, and medium enterprises (MSME), boosting their competitiveness and economic impact.
Additionally, the Sampoerna Entrepreneurship Training Center has trained over 72,000 MSME players in various business skills. Emphasizing gender balance, Ivan noted that women represent 46 percent of department heads. Sampoerna’s commitment to human capital aligns with its “Three Hands” philosophy, aiming to advance Indonesia collectively through sustainable business practices.
May 28, 2024
Sampoerna Profit Jumps by One Third

Photo: Taco Tuinstra
Net profit of Sampoerna grew 28 percent to IDR8.1 trillion ($501.11 million) in 2023. With shipments of 83.4 billion cigarettes, the company remained the undisputed leader in Indonesia, claiming a market share of 28.6 percent.
“2023 marked a year of return to robust profitable growth, with Sampoerna reaching significant milestones for advancing scientifically substantiated smoke-free products, increasing its investment and employment in Indonesia, and generating strong multiplier effects, in line with the country’s priority to enhance down-streaming.” said Sampoerna President Director Vassilis Gkatzelis in a statement.
Sampoerna’s performance was driven in part by the recovery of the hand-rolled kretek cigarette (SKT) segment in Indonesia. After declining for many years, its share rose from 17 percent of overall tobacco sales in 2019 to 28 percent in 2023, boosted by the government’s favorable tax treatment of this labor-intensive sector.
In early 2024, Sampoerna added SKT production facilities and third-party operators, creating employment for tens of thousands of new workers.
The company has also been developing its smoke-free portfolio in Indonesia. In 2023, the company inaugurated a dedicated factory in Karawang, near Jakarta, which supplies both the domestic market and customers in the Asia Pacific region.
In the Jakarta urban area, the company’s IQOS tobacco-heating product reached a market share of 3.5 percent in the fourth quarter of 2023, an increase of 2 points from the fourth quarter of 2022.
To date, Sampoerna has invested $300 million in smoke-free products in Indonesia.
Gkatzelis will leave Sampoerna in May and join Philip Morris International’s executive leadership team as president of the East Asia, Australia and PMI duty-free region.
His successor at Sampoerna is Ivan Cahyadi.
April 24, 2024
Ivan Cahyadi to Lead Sampoerna

Ivan Cahyadi (second from bottom left) will assume his new function on May 1. (Photo: Sampoerna)
Ivan Cahyadi will succeed Vassilis Gkatzelis as president director of Philip Morris International’s Sampoerna subsidiary in Indonesia on May 1.
Gkatzelis will join PMI’s executive leadership team as president of the East Asia, Australia and PMI duty-free region, overseeing strategic markets such as Japan, South Korea and China.
“Vassilis has successfully led Sampoerna through a stellar performance over the last two years, allowing it to continue to realize its commitment to creating value and multiplier effects for the society at large,” said Sampoerna President Commissioner John Gledhill in a statement. “I would like to thank Vassilis for his contributions to Sampoerna and congratulate him on his new global leadership role at PMI.”
Gledhill expressed confidence in Cahyadi’s leadership, praising his extensive experience and leadership.
Cahyadi joined Sampoerna in 1996 as a management trainee and progressed through many positions in Sampoerna, including organization development manager (1999–2000), manager of market intelligence (2000–2004), head of sales strategic development (2004–2005) and head of sales zone (2005–2009). He was named director of sales and distribution for PMI’s affiliate in Malaysia in 2009 before returning to Sampoerna in 2010 as head of zone and being appointed as a member of the board of directors in 2016.
In addition to approving Cahyadi’s appointment, Sampoerna shareholders also endorsed Yohan Lesmana as a director during the company’s annual meeting on April 23.
April 23, 2024
Sampoerna Opens Third-Party Factory

Photo: Sampoerna
Sampoerna opened a new third-party operator (TPO) factory for hand-rolled kretek cigarettes (SKT) in Jaten, Central Java, Indonesia, on March 27.
Owned and operated by Attin Sigaret Indonesia, Jaten facility employs approximately 2,000 people.
During the inauguration ceremony, Directorate General of Customs and Excise Representative Iyan Rubiyanto lauded the anticipated economic impact of the new factory.
“We hope that the opening of this TPO will continue to absorb workforce and create a multiplier effect on the surrounding economy,” he was quoted as saying. “The sustainability of the industry is among the focus of the Directorate General of Customs and Excise, Ministry of Finance. Therefore, let’s maintain economic sustainability as a positive impact of the SKT industry.”
Following a period of sustained decline, the SKT segment started recovering in 2020 after the government started supporting the segment in an effort to boost employment. Partially as a result of its measures, the SKT’s share of the tobacco market increased from 17 percent in 2019 to 28 percent in 2023.
“On behalf of Sampoerna and tens of thousands of SKT hand-rollers, I would like to express my gratitude for the concern and support of the Directorate General of Customs and Excise, which represents the central government, in ensuring the sustainability of the tobacco industry, including protecting the SKT labor-intensive sector through various policies,” said Sampoerna Director Elvira Lianita in a statement.
TPO Jaten is one of five new TPOs that officially started operations in the first quarter of 2024. It complements Sampoerna’s other new SKT partnerships in Cilacap, Purwodadi, and Kebumen Regencies in Central Java, as well as Bojonegoro Regency in East Java.
Sampoerna now has partnerships with 43 TPOs, all of which are owned and operated by local entrepreneurs and/or local cooperatives. The company now employs, directly and indirectly, more than 90,000 people, about 90 percent of whom are working in SKT production facilities.
April 3, 2024
Sampoerna Opens New Third-Party Facility

Photo: Sampoerna
Sampoerna and Koperasi Karyawan Redrying Bojonegoro have opened a new third-party operator (TPO) production facility for hand-rolled kretek cigarettes in Dander, Bojonegoro Regency, East Java.
During the inauguration ceremony, East Java Governor Khofifah Indar Parawansa welcomed the investment and its impact on regional employment. “I hope MPS Dander will improve the welfare of not only its employees but also their families and the community in Bojonegoro. Amidst the digital ecosystem transformation era, the SKT industry and TPOs can be a solution, especially for workforce absorption,” she said in a statement.
“The multiplier effect of the SKT industry is extraordinary. I believe that TPO Dander will strengthen the economy of Bojonegoro Regency,” said Khofifah.
Khofifah also expressed satisfaction with the high level of female participation in the facility’s workforce. “Because women who have their own income will become mothers of the nation,” she noted. “Therefore, the recruitment of women as workers at TPO Dander affirms women’s participation in development.”
Sampoerna’s head of hand-rolled manufacturing, Sinta Hartanto, said his firm was committed to continued value creation. “As a company that has been operating for more than 110 years in Indonesia, our vision is to continue playing an active role in supporting the growth of the national economy by encouraging down-streaming in the tobacco industry, long-term investments, and workforce absorption to create sustainable value. This additional partnership is part of our efforts to realize that vision,” he said.
With the absorption of more than 3,000 workers in TPO Dander along with additional absorptions in various other factories and TPOs, Sampoerna currently has more than 80,000 direct and indirect employees, about 90 percent of whom are working in SKT production facilities.
“In addition to new partnerships with local entrepreneurs/cooperatives, as well as opening new employment opportunities for thousands of workers, Sampoerna’s new SKT manufacturing facilities and additional TPOs will also increase raw materials absorption of tobacco and clove from Indonesian farmers. Hand-rolled cigarettes require twice as much tobacco and cloves as machine-made cigarettes,” explained Sinta.
TPS Dander that is owned by Koperasi Kareb became the 39th TPO in Java and the fourth in Bojonegoro Regency that partners with Sampoerna. All TPOs are owned and operated by local entrepreneurs and/or local cooperatives to produce Sampoerna’s SKT brands. Sampoerna operates seven production facilities in several cities/regencies in Java, including four SKT production facilities in Surabaya, Malang, and Probolinggo, East Java.

February 5, 2024
Sampoerna Expands

Photo: Taco Tuinstra
Sampoerna plans to establish new factories for hand-rolled clove cigarettes (SKT) throughout Java, Indonesia, hiring tens of thousands of employees and creating multiplier effects for local communities, the company announced on its website.
This plan will be first realized with a new SKT production facility in Blitar City, East Java, and one in Tegal Regency, Central Java, with operations scheduled to commence in the first half of 2024.
“As a company that has been operating for 110 years in Indonesia, the new addition to Sampoerna’s SKT production facilities through an investment of up to IDR638 billion [$42 million] will strengthen Sampoerna’s SKT portfolio,” said Sampoerna President Director Vassilis Gkatzelis.
“With a total new workforce of tens of thousands of workers, directly and indirectly, we are optimistic that this action by Sampoerna will increase employment opportunities in the formal sector for the local community while creating a strong multiplier effect for economic development and becoming one of the growth drivers in those regions.”
Currently, Sampoerna operates four SKT manufacturing facilities in Surabaya, Malang and Probolinggo; two machine-made cigarette production facilities in Pasuruan and Karawang; and one smoke-free tobacco product manufacturing facility in Karawang, where the company manufactures Heets for Philip Morris International’s IQOS tobacco-heating product.
In addition, Sampoerna also partners with 38 third-party operators (TPO) across 28 regencies/cities in Java. Sampoerna currently has more than 76,000 direct and indirect employees, about 90 percent of whom are working in the SKT production facilities.
In addition to opening Sampoerna’s new SKT production facilities in Blitar City and Tegal Regency, there will be additional employment of tens of thousands of people in existing TPOs in East Java, Central Java, the Special Region of Yogyakarta, and West Java, as well as with the opening of five new TPOs in East Java and Central Java in the first half of 2024.
After a long period of decline, the SKT segment has started to recover in Indonesia, with the market share going up to around 27 percent until the third quarter of 2023. According to Sampoerna, this development has been driven in part by the government’s excise tax policy which, especially since 2021, which considers employment.
November 22, 2023
Sampoerna Announces Executive Changes

Photo: Taco Tuinstra
Sampoerna has appointed Johan Bink as the operations director, succeeding Dina Lombardi, and Gunnar Beckers as marketing director, succeeding Francisca Rahardja.
Previously, Bink served as director of manufacturing at Papastratos, an affiliate of Philip Morris International in Athens, with over 33 years of experience in supply chain management and production planning.
Beckers previously served as PMI global head of consumer experience in Lausanne, Switzerland, with over 20 years of experience in marketing.
“Johan’s extensive experience in operations, from production floor to central functions, and his strong communication and leadership skills will continue to be great assets in his new role,” said Sampoerna President Director Vassilis Gkatzelis in a statement.
“Meanwhile, Gunnar is a well-rounded executive, who has consistently created value across diverse assignments at global, regional and market levels. His strategic perspective, wide international experience, strong collaborative spirit, focus on consumers, and ability to build brands will be great assets in his new role.”
Gkatzelis also expressed his gratitude to Lombardi and Rahardja for their contributions and leadership at Sampoerna. Both will assume new responsibilities within the PMI organization.
“Ibu Dina has always prioritized the safety and development of our people, thus role-modeling the Sampoerna and PMI values during the very challenging pandemic period. She guided Operations in reaching monumental milestones, including the establishment of the manufacturing facility for innovative smoke-free tobacco products,” said Gkatzelis.
“Meanwhile, Ibu Francisca has been leading the Marketing organization through very challenging times in a forward-looking way. In addition, she built solid foundations for the Consumer-Centric Organization. At the same time, she also contributed to the early journey of the innovative smoke-free tobacco products that Sampoerna introduced to adult consumers in Indonesia,” said Gkatzelis.
August 29, 2023
Sampoerna Sales Up 12.5 Percent

Photo: Taco Tuinstra
Sampoerna reported net sales of IDR111.2 trillion ($7.38 billion) in 2022, up 12.5 percent from the previous year. Sales volume at the Indonesian cigarette manufacturer increased 4.8 percent to 86.8 billion units, bolstered by the performance of premium brands such as Sampoerna A, Dji Sam Soe and Marlboro.
“The combination of Covid-19 with the impact of the double-digit excise tax increases and widening excise tax gaps has resulted in major challenges for the tobacco industry but Sampoerna remained focused on creating values for its stakeholders, Sampoerna President Director Vassilis Gkatzelis told shareholders at the company’s annual general meeting.
“We evolved our strategy in a forward-looking way and delivered a robust topline performance in 2022 with year-on-year volume growth and stabilization of market share despite the headwinds and accelerated downtrading to the lower-taxed Below Volume Tier 1 segment.
“We also reached a critical strategic milestone with our smoke-free products manufacturing facility in Karawang with an investment valued at more than $186 million, which started operations in the fourth quarter of 2022 to fulfill demands both for the domestic market and Asia Pacific.”
Gkatzelis attributed Sampoerna’s 2022 performance to solid business fundamentals, robust route to market and resilient organization. Although the company’s profitability decreased on a yearly basis and is still significantly lower versus the pre-pandemic levels, key profitability metrics improved during the second half of 2022, both sequentially versus the first half and the year before, driven by returning to net positive pricing as of the third quarter of 2022.
The positive momentum continued in the first quarter of 2023 with IDR27 trillion in net revenues and IDR2.2 trillion in net profit, up by 3.1 percent and by 12.8 percent, respectively, compared to the same period last year. In this first quarter of 2023, Sampoerna grew its market share to 28.5 percent, up 0.2 percentage points compared to the comparable 2022 quarter.
Vassilis praised the Indonesian government for providing business certainty through the issuance of a multi-year tobacco products excise policy for 2023-2024. “We certainly wish the government issues future policies that can support the sustainability of the tobacco industry and enable economic recovery to pre-pandemic levels,” he said in a statement.
According to Vassilis, a predictable environment is key when it comes to delivering sustainable value creation for the broader ecosystem, especially for long-standing investors in Indonesia.
“I am proud to share that early this year Sampoerna completed its investment in building a production facility for the innovative smoke-free tobacco products in Karawang, West Java,” he said.
“Additionally, we recently launched the latest technology and innovation of smoke-free tobacco products, namely IQOS ILUMA, through the continuation of IQOS Club with a limited launch in 10 major cities in Indonesia. These are key milestones to mark Sampoerna’s 110 years of presence in the country.”
Indonesia’s facility for heated tobacco sticks is PMI’s first in Southeast Asia and the seventh globally. “Sampoerna’s investment is a vote of confidence in the investment climate of Indonesia,” said Vassilis. “The new factory in Karawang entails further value creation by increasing research capacity, absorbing high-skilled workers, purchasing local tobacco supplies, operating digital service centers, improving export performance and empowering MSMEs [micro, small and medium-sized enterprises] which includes digitalization support and increasing the capacity of traditional retailers,” said Vassilis.
June 12, 2023
Sampoerna Commits to Value Creation

Photo: Taco Tuinstra
Sampoerna has reiterated its commitment to creating value and contributing to a sustainable future as the company celebrates its 110th anniversary, reports The Jakarta Post.
Speaking to reporters on May 26, President Director Vassilis Gkatzelis highlighted Sampoerna’s investments in Indonesia.
Since its sale to Philip Morris International in 2005, Sampoerna has invested $6.3 billion in the country. Recently, it constructed a $186 million factory in Karawang, West Java, dedicated to the production of smoke-free tobacco products, such as PMI’s successful IQOS heat-not-burn device.
The facility started operations in the fourth quarter of 2022 and supplies both the domestic market and Asia Pacific.
Sampoerna also has two cutting-edge laboratories—one in Pasuruan, East Java, and one in Karawang. Directly and indirectly, the company operates 45 manufacturing facilities and employs more than 66,000 people in Indonesia. In addition, it works with 22,000 farmers who grow either tobacco or the cloves required to manufacture kretek cigarettes.
Sampoerna also partners with third-party operators owned by local entrepreneurs or cooperatives specializing in hand-rolled manufacturing.
Gkatzelis, who took charge of Sampoerna last year, also touched on the importance of sustainability. “Every time we act, we try to create sustainable value for the long term,” he was quoted as saying. “So, 110 years of Sampoerna’s presence is important, but we need to create values for the next 110 years.”

June 7, 2023