The new facility in East Java can produce up to 21 billion cigarettes a year and is intended to serve as the company’s manufacturing base for Southeast Asian markets.
South Korean tobacco company KT&G said its second factory in Indonesia has begun operations. The facility is in Pasuruan, East Java; the company’s first Indonesian tobacco plant is in Surabaya.
KT&G plans to use the new site as a production base for exports to neighboring countries and other markets. It has annual capacity of 21 billion cigarettes, bringing the company’s total Indonesian capacity to 35 billion.
KT&G operates plants in South Korea, Russia, Turkey, Indonesia and Kazakhstan. The company expects the combined annual capacity of its four overseas plants to reach 65 billion cigarettes, without specifying a timetable. Its three domestic plants have combined capacity of 56 billion cigarettes a year.
KT&G aims to generate half of its sales overseas in 2027. It is targeting revenue of 10 trillion won, or about $6.8 billion, next year, compared with 6.58 trillion won in 2025.
The company says it will maintain its conventional cigarette business while strengthening heat-not-burn tobacco products and health functional foods. Conventional cigarettes account for about 90% of sales, with HNB products making up the remaining 10%, according to KT&G. Unlike e-cigarettes, HNB products contain tobacco that is heated without being burned.