6 October 2015 (closed)
USD/IDR (14,709) +55.00 +0.38%
EUR/IDR (16,461) +101.86 +0.62%
Indonesia Stock Exchange (4,445.78) +102.08 +2.35%
Portfolio Selected Companies (96,417) +2,764.00 +2.95%
PT Gudang Garam Tbk is an Indonesian company engaged in the manufacturing of cigarettes. The company is a leading manufacturer of kretek cigarettes (these clove-type of cigarettes are a trademark of Indonesia). It produces a wide range of kretek cigarettes including low-tar, low-nicotine variants and traditional hand-rolled kretek, which are distributed domestically and worldwide.
At end 2013, the company had a market share of about 20.6 percent of the domestic cigarette market. Due to the high number of smokers in Indonesia, Gudang Garam - as well as other companies in Indonesia's cigarette industry - is a major source of revenue for the Indonesian government in terms of excise duties and corporate income tax.
Gudang Garam is one of the companies with the largest market capitalization listed on the Indonesia Stock Exchange (IDX).
|Industry Sector||Consumer Goods Industry|
|Industry Sub Sector||Tobacco Manufacturers|
|Established||26 June 1958|
|Listed||27 August 1990|
|Listed company code||GGRM|
|Major Shareholders (>5%)||Suryaduta Investama (69.29%)
Suryamitra Kusuma (6.26%)
|Key Subsidiaries||Surya Pamenang
Stock Quote Gudang Garam - GGRM:
Gudang Garam has established primary and secondary kretek manufacturing operations at two main sites. Kediri, home to the company headquarters, and Gempol. Both sites are located on Java, Indonesia's most populous island.
Gudang Garam operates an in-house printing facility and has three active subsidiaries: Surya Pamenang, producing paper board used for the manufacturing of Gudang Garam packaging, Surya Madistrindo, sole distributor of the company’s products, and Surya Air which provides non-scheduled air transport services.
In 2012, 84 percent of Gudang Garam's cigarettes production was machine-made, while the remaining 16 percent was hand-rolled kretek.
Gudang Garam's Financial Highlights:
|- Domestic Net Sales||28,545.3||31,122.7||35,779.8||39,790.6||46,983.9||53,119.9|
|- Export Net Sales||1,706.3||1,850.4||1,912.1||2,093.7||2,044.8||2,317.1|
|Earnings per Share¹||977||1,796||2,155||2,544||2,086||2,250|
in billion IDR rupiah unless otherwise stated
¹ in IDR rupiah
Source: Gudang Garam, Annual Report 2013
Overview of the Tobacco Industry in Indonesia
Indonesia has a large and diverse tobacco consumer market with a significant percentage of adult smokers. In 2012, approximately 67 percent of Indonesian men and 5 percent of Indonesian women smoked (Indonesia contains a total population of over 240 million people). Raw materials are mostly sourced domestically and in combination with cheap labour it makes production costs relatively low. As such, the price of a package of cigarettes in Indonesia is cheap. This has also been the reason why Indonesia's tobacco industry was not touched by the recent global economic downturn. Indonesians continue to consume more cigarettes, although exports have declined. However, exports contribute little to Indonesian tobacco producers' sales and profit figures and therefore the declining export numbers are not an issue.
The most popular cigarettes in Indonesia are kretek cigarettes. About 85 percent of all smokers in Indonesia prefer kretek cigarettes to white cigarettes. Kretek are clove cigarettes that consist of tobacco (70 percent) and ground cloves, clove oil and other additives (30 percent). The kretek cigarette is a trademark of Indonesia.
Issues that can curb expansion of the tobacco industry in Indonesia are government policies. The government regularly decides to increase taxes or excises on cigarettes. Moreover, the government issued new rules that order tobacco companies to put various warning labels on cigarette packages, aimed at warning consumers about its health effects. In other words, it aims to make cigarettes less attractive.
Lastly, weak clove harvests in Indonesia can cause temporarily high production costs (as happened in 2012).
There are four Indonesian tobacco companies that are listed on the Indonesia Stock Exchange (IDX):
Both Gudang Garam and HM Sampoerna are among the companies with the largest market capitalization in Indonesia.
Jalan Semampir II/1
Kediri - 64121
Phone: +62 354 682 091
Fax: +62 354 681 555
Jakarta Representative Office
Jalan Jenderal A. Yani No. 79
Jakarta - 10510
Phone: +62 21 420 2460
Fax: +62 21 424 3136