KT&G launches new Indonesia plant, completes 5-country production network
Summary
KT&G began full-scale operations at a new cigarette plant in Pasuruan, East Java, completing a five-country production network spanning Korea, Indonesia, Russia, Kazakhstan and Turkey. The plant is intended to meet growing demand and support exports from Indonesia to Taiwan, Mongolia, Nigeria and India. Once all nine lines are installed, it will produce up to 21 billion cigarettes annually, raising KT&G’s Indonesian capacity to 35 billion. KT&G aims to increase overseas production to more than 60 percent by 2028.
Key Facts
- KT&G entered Indonesia in 2011 by acquiring a local company and ranks fourth in the country’s cigarette market.
- The company signed an agreement with Indonesia’s Ministry of Investment and the Investment Coordinating Board in September 2023, began construction in April 2024 and started trial operations in the first half of 2026.
- KT&G plans to invest 2.4 trillion won ($1.8 billion) overseas as part of its overseas growth investment program.
- KT&G’s four overseas production bases are expected to have a combined annual capacity of up to 65 billion cigarettes.
- The new plant’s products will be sold in Indonesia and exported to Taiwan, Mongolia, Nigeria and India.
KT&G CEO Bang Kyung-man delivers a speech during an opening ceremony for the company's cigarette plant in Indonesia, Tuesday (local time). Courtesy of KT&G
KT&G has begun full-scale operations at a new cigarette plant in Indonesia, completing a five-country global production network spanning Korea, Indonesia, Russia, Kazakhstan and Turkey.
KT&G said Wednesday that it held an opening ceremony for the plant in Pasuruan, East Java, on Monday
Indonesia is one of the world's major tobacco markets and a key export hub in the Asia-Pacific region. KT&G entered the market in 2011 by acquiring a local company. It has since introduced Esse and Juara, its leading brands in Indonesia. The company ranks fourth in the country's cigarette market.
KT&G built the plant to meet growing demand. It signed an agreement with Indonesia's Ministry of Investment and the Investment Coordinating Board in September 2023, began construction in April 2024 and started trial operations in the first half of 2026.
Once all nine production lines are installed, the plant will have an annual capacity of up to 21 billion cigarettes. Combined with the existing plant's 14 billion-cigarette capacity, KT&G's total capacity in Indonesia will reach 35 billion cigarettes a year, making it the company's largest overseas production base.
Products will be sold in Indonesia and exported to Taiwan, Mongolia, Nigeria and India. KT&G plans to use Indonesia as an export hub connecting the Asia-Pacific region with global markets.
KT&G completed a new plant in Kazakhstan in April 2025 as part of its overseas growth investment program. It announced plans to invest 2.4 trillion won ($1.8 billion) overseas.
The company's four overseas production bases are expected to have a combined annual capacity of up to 65 billion cigarettes. KT&G aims to raise the share of overseas production to more than 60 percent by 2028.
“With the new plant in Indonesia as the final piece, KT&G has completed its large-scale overseas investment program and established a five-country global production system that will serve as a solid foundation for our global business and future growth,” KT&G CEO Bang Kyung-man said.
“By strategically leveraging our production bases in Korea and overseas, we will maximize profitability, strengthen the competitiveness of our global business and continue to increase shareholder and corporate value.”
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