Below is a list with tagged columns and company profiles.

Today's Headlines Kretek

  • Is the Cigarette Manufacturing Industry Indonesia’s Biggest Sunset Industry?

    Is the Cigarette Manufacturing Industry Indonesia’s Biggest Sunset Industry?

    Stakeholders in Indonesia’s cigarette manufacturing industry were not amused when the Indonesian government announced its plans to raise minimum prices of cigarettes and to increase the excise tax on tobacco products per 1 January 2020. Reportedly, the central government plans to raise the excise tax on tobacco products by an average of 23 percent, which will then raise the minimum price of cigarettes across categories by an average of 35 percent.

    Read more ›

  • Advertising Spending in Indonesia Recovered, TV & Tobacco Dominate

    Advertising Spending in Indonesia Recovered, TV & Tobacco Dominate

    Growth of advertising spending in Indonesia's printed and electronic media grew 14 percent year-on-year (y/y) to IDR 134.8 trillion (approx. USD $10.1 billion) in 2016 from IDR 118 trillion in the preceding year. This growth pace is nearly double the annual growth pace that was recorded in 2014 and 2015 at 8 percent and 7 percent, respectively. These data come from a new report released by Nielsen’s Advertising Information Service earlier this week.

    Read more ›

  • Hand-Rolled Clove Cigarette Industry of Indonesia in Trouble

    Hand-Rolled Clove Cigarette Industry of Indonesia in Trouble

    Production of hand-rolled clove cigarettes (kretek) fell 30 percent year-on-year (y/y) in 2016 due to stricter smoking regulations in Indonesia. Kretek is a clove cigarette that consists of tobacco (70 percent), and ground cloves, clove oil as well as other additives (30 percent). These clove cigarettes are the clear favorite of Indonesia's smoker community. It is estimated that 85 percent of all smokers in Indonesia prefer kretek cigarettes over white cigarettes. In total, around 55 million Indonesians consume tobacco-related products.

    Read more ›

  • Philip Morris to Sell Stake in HM Sampoerna to Increase Free Float

    Philip Morris to Sell Stake in HM Sampoerna to Increase Free Float

    In order to comply with new rules, Philip Morris International Inc. will increase the free float ratio of its Indonesian unit HM Sampoerna on the Indonesia Stock Exchange (IDX) from 1.82 percent to 7.50 percent. Per January 2016, all listed companies on the IDX are required to have at least 7.5 percent of their shares in public hands. Currently, however, Philip Morris owns 98.18 percent of HM Sampoerna, Indonesia’s largest cigarette manufacturer and among the largest Indonesian companies listed on the IDX in terms of market capitalization.

    Read more ›

  • Indonesian Tobacco Products Subject to Excise Tax Hike in January 2015

    Starting from January 2015, Indonesian tobacco products are subject to an average tax rise of 8.7 percent. The excise tax on machine-rolled cigarettes becomes IDR 355 (USD $0.03) and on hand-rolled cigarettes IDR 290 (USD $0.02) per stick. The tax hike is implemented by the government in a move to increase state income through tax revenues. The higher excise tax is expected to have a minor effect on tobacco sales in Indonesia as retail prices for cigarettes remain among the lowest in the Southeast Asian region.

    Read more ›

  • Indonesia Files Complaint to WTO over Australia’s Plain Packaging Act

    Indonesia and four other countries have filed an official complaint to the World Trade Organization (WTO) over a recent new law in Australia. This law (‘2011 Tobacco Plain Packaging Act’), in effect since 1 December 2012, requires the removal of all branding (such as colours, imagery, and corporate logos) on cigarette packages. Indonesia’s Trade Ministry believes that the law violates several WTO rules, such as an agreement on trade-related aspects of intellectual property rights and an agreement on the technical barriers to trade.

    Read more ›

  • Indonesian Tobacco Giant Sampoerna Shuts down Two Cigarette Plants

    Indonesian Tobacco Giant HM Sampoerna Shuts down Two Cigarette Plants

    HM Sampoerna, Indonesia's largest tobacco company, decided to close two of its seven hand-rolled cigarette factories as the company needs restructuring due to its declining market share in the country's hand-rolled cigarettes industry. The market share fell from 30.4 percent in 2009 to 23.1 percent in 2013 as consumers are shifting to machine-rolled cigarettes. HM Sampoerna's hand-rolled cigarette plants in Jember and Lumajang (both in East Java) will be closed on 31 May 2014 and will lead to the termination of 4,900 employees.

    Read more ›

  • Company Profile of HM Sampoerna: Indonesia's Largest Tobacco Company

    HM Sampoerna, the largest tobacco company of Indonesia, controls about 29 percent of the Indonesian tobacco market. The company operates nine manufacturing facilities in Indonesia: two machine-made kretek production facilities as well as seven hand-rolled kretek production facilities (kretek cigarettes are the highly popular clove cigarettes, a trademark of Indonesia). The company also distributes the famous Marlboro brand on the domestic market. In 2005, Sampoerna was sold to Philip Morris, an international cigarette and tobacco giant.

    Read more ›

  • Company Profile of Gudang Garam: a Leading Indonesian Tobacco Producer

    Gudang Garam is a leading Indonesian manufacturer of kretek cigarettes (clove cigarettes), which are the favorite choice of Indonesians. Indonesia has a large and diverse tobacco consumer market with a significant percentage of adult smokers. In 2012, it was estimated that 67 percent of Indonesian men and 5 percent of Indonesian women smoke (Indonesia has a total population of over 240 million people). In 2012, Gudang Garam had a market share of about 20 percent of the domestic cigarette market.

    Read more ›

  • Indonesian Tobacco Industry Expected to Continue its Growth in 2014

    After the Indonesian government abandoned the idea to increase excises on cigarettes, the production of cigarettes in Indonesia is expected to increase to between 355 and 360 billion cigarettes in 2014. However, in order to meet that target, it is also important that the country's macroeconomy - particularly the inflation rate - remains stable. This year, Indonesian cigarette production is expected to reach 340 billion cigarettes. Indonesia has one of the world's largest markets for cigarettes.

    Read more ›

Latest Columns Kretek

  • Higher Cigarette Excise; Indonesia’s Tobacco Industry in Trouble?

    Higher Cigarette Excise; Indonesia’s Tobacco Industry in Trouble?

    One of the last decisions of the Susilo Bambang Yudhoyono administration before being replaced by the new Joko Widodo-led administration was to raise the tobacco excise by an average of 8.7 percent per 1 January 2015. This excise will be applied to all tobacco-related manufactured products. The higher excise, stipulated by a Finance Ministry decree, will boost state income and will also help to curb smoking. About 65 percent of Indonesian men smoke, supported by the cheap price of a package of cigarettes.

    Read more ›

  • Revenue or Health: Dilemma of Curbing Indonesia's Tobacco Consumption

    Revenue or Health: the Dilemma of Curbing Indonesia's Tobacco Consumption

    Widespread cigarette consumption among Indonesians (especially men) can have a negative impact on the country’s current demographic bonus. One of Indonesia’s strongpoints in terms of economic make-up is that it has a large and young, thus potentially productive, population. Indonesians in the productive age (15 to 64 years) outnumber those that are categorized as youth (below 15 years) and elderly (over 65 years). This large productive group should provide a boost to Indonesia’s economy in the next two decades.

    Read more ›