Sampoerna announced on its website that it plans to build a new hand-rolled cigarette factory in Java, Indonesia, employing tens of thousands of people and creating a multiplier effect for the local community.
The plan will begin with the establishment of a new SKT production facility in Blitar City, East Java, and Tegal Regency, Central Java, with operations scheduled to begin in the first half of 2024.
Vassilis Gkatzelis, president of Sampoerna, said: "As a company that has been operating in Indonesia for 110 years, Sampoerna will strengthen Sampoerna's SKT product portfolio by investing up to IDR 638 billion (USD 42 million) to increase SKT production facilities."
He said: “Having added tens of thousands of new workers directly and indirectly, we are optimistic that this action by Sampurna will increase formal sector employment opportunities in local communities while creating a strong multiplier effect for economic development and Be one of the growth drivers in these regions.”
Currently, Sampoerna operates four SKT manufacturing plants in Surabaya, Malang, and Probolinggo; two mechanical cigarette production facilities in Pasuruan and Karawang; and a smokeless tobacco products manufacturing plant in Karawang, where the company supplies Philip Mo Reese International's IQOS tobacco heating products are produced by Heets.
In addition, Sampoerna also cooperates with 38 third-party operators (TPO) in 28 counties/cities in Java. Sampoerna currently has more than 76,000 direct and indirect employees, about 90% of whom work in SKT production plants.
In addition to opening new SKT production facilities in Blitar City and Tegal Regency, Sampoerna will add tens of thousands of employment opportunities in existing TPOs in East Java, Central Java, Yogyakarta Special Region and West Java, with plans to open in the first half of 2024. Opening of five new TPOs in East Java and Central Java.
SKT's market share in the field will rise to about 27% by the third quarter of 2023 (July to September), and will begin to recover after a long period of decline. Sampoerna said the recovery of the SKT sector is supported by the government's excise tax policy on tobacco products, especially since 2021, which takes into account employment absorption.