SEOUL (dpa-AFX) - KT&G Corp. (033780.KS), a South Korean tobacco company, on Wednesday announced that it has begun full-scale operations at its new plant in Indonesia, with an expected annual cigarette production capacity of up to 21 billion sticks.
The new facility is part of KT&G's 2.4 trillion won commitment to overseas facility investments, to meet growing demand in Indonesia and overseas markets.
With the new plant, the firm completes its five-country global production system including South Korea, Indonesia, Russia, Kazakhstan and Türkiye.
As part of its efforts to expand production in Indonesia and meet growing demand, KT&G built the new facility alongside its existing Indonesian plant.
Following an agreement with Indonesia's Ministry of Investment/Investment Coordinating Board in September 2023, construction began in April 2024, with trial operations starting in the first half of 2026.
The new plant in Pasuruan, East Java, is expected to have nine cigarette manufacturing lines with annual production capacity of up to 21 billion cigarettes once fully equipped.
The new plant will supply the Indonesian market and export to Taiwan, Mongolia, Nigeria and India, strengthening Indonesia's role as an export hub.
Combined with its existing Indonesian plant's annual capacity of 14 billion sticks, KT&G expects total production capacity in Indonesia to reach up to 35 billion cigarettes annually, making it the company's largest overseas production base.
Looking ahead, KT&G expects the combined maximum production capacity of its four overseas manufacturing bases in Indonesia, Russia, Kazakhstan and Türkiye to reach 65 billion cigarettes annually. The company plans to increase the share of overseas production to more than 60 percent of total production by 2028.
Bang Kyung-man, CEO of KT&G, said, '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. 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.'
KT&G shares closed 3,200 won or 1.81% higher at 179,600 won on the Korea Stock Exchange.
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