KT&G CEO highlights Indonesia as new global production hub

28 April 2024

By Hwang Joo-young, Korean Herald

KT&G’s newly-appointed CEO Bang Kyung-man recently embarked on a business trip to Indonesia, a nation the company projects as a new production hub on the global stage, according to the South Korean cigarette manufacturer on Sunday.

The business trip is Bang’s first since assuming the role of CEO last month. Following shareholder approval during the company’s annual general meeting on March 28, Bang, formerly the company’s vice president, ascended to his new leadership position.

During his visit to Indonesia, Bang on Friday attended a ground-breaking ceremony for KT&G’s second and third factories in Surabaya, Indonesia.

At the ceremony, Bang expressed high expectations for the new facilities, envisioning Indonesia as the company’s largest overseas export base.

“Indonesia will serve as our primary global export hub, driving the expansion of our export business in the Asia Pacific and the Middle East markets,” Bang said, “We will continue to develop the global production hub in Indonesia as a core growth engine for the company.”

The two new factories, scheduled to commence production in 2026, will span 190,000 square meters and will have the capacity to manufacture 21 billion cigarettes annually.

Combined with the company’s existing factory, they are projected to boost KT&G’s production capabilities in Indonesia to approximately 35 billion cigarettes per year, the company said.

Friday’s ceremony was attended by government officials from both Indonesia and South Korea, including the governor of East Java Province, Adhy Karyono, Deputy Minister of the Indonesian Ministry of Investment Andi Maulana, and commercial attache of the Embassy of Korea in Indonesia Han Jong-ho, along with some 80 other officials.

The construction of the new factories aligns with KT&G’s growth investment plans unveiled last year.

During its Future Vision Declaration Ceremony held in January 2023, KT&G outlined electric cigarettes, increased overseas cigarette production and health functional food as core objectives for the company’s mid-to-long-term vision to become a “global top-tier” company.

In line with this initiative, KT&G intends to elevate the proportion of its overseas sales revenue to over 50 percent of its total sales revenue by 2027, the company said.

Last year, KT&G also began construction of a new factory in Kazakhstan for cigarette exports to the European and Asian markets, while expanding its electronic cigarette production line at its domestic factory in Daejeon.