KT&G's No. 2 plant in Indonesia begins operations
KT&G Corp.'s No. 2 plant in Indonesia. Courtesy of KT&G
KT&G Corp., Korea's dominant tobacco company, said Wednesday its second plant in Indonesia has begun operations as it expands its presence in Southeast Asia.
The new plant is located in Pasuruan, East Java, while KT&G's first tobacco manufacturing plant in Indonesia is in Surabaya, the company said in a press release.
The new Indonesian plant will serve as KT&G's manufacturing base in Southeast Asia, producing goods for export to neighboring countries and other markets, it said.
The plant has an annual production capacity of 21 billion cigarettes, bringing KT&G's total production capacity in Indonesia to 35 billion cigarettes.
KT&G operates tobacco plants in five countries — Korea, Russia, Turkey, Indonesia and Kazakhstan.
The combined annual production capacity of its four overseas plants is expected to reach 65 billion cigarettes, the company said, without specifying when that target would be reached.
KT&G's three domestic plants have a combined annual production capacity of 56 billion cigarettes.
The company aims to generate half of its sales overseas in 2027. It is targeting sales of 10 trillion won ($6.8 billion) next year, up from 6.58 trillion won in 2025.
While maintaining its focus on conventional cigarettes, the company said it will strengthen its heat-not-burn (HNB) and health functional food businesses.
Unlike e-cigarettes, HNB products contain tobacco. The tobacco is heated to a high temperature without being burned, producing an aerosol that users inhale.
The company generates about 90 percent of its total sales from its conventional cigarette business and the remaining 10 percent from HNB products.