Seoul – October 07, 2026 -- KT&G Corporation has started full-scale operations at a new cigarette plant in Pasuruan, East Java, pushing its Indonesian production capacity to as much as 35 billion sticks annually and completing a five-country global manufacturing network spanning South Korea, Indonesia, Russia, Kazakhstan and Türkiye.
New Pasuruan plant lifts Indonesia to KT&G's largest overseas production base
Once all nine cigarette manufacturing lines are installed, the new facility alone will carry an annual capacity of up to 21 billion sticks. Combined with the existing plant's 14-billion-stick capacity, total output in Indonesia will reach up to 35 billion sticks, making the country KT&G's biggest manufacturing hub outside South Korea.
CEO Bang Kyung-man opened the plant on October 6 alongside Adhy Karyono, Regional Secretary of East Java Province, and Yoon Soon-goo, South Korea's Ambassador to Indonesia. KT&G first entered Indonesia in 2011 through a local acquisition and now holds fourth place in the country's cigarette market by share, selling its ESSE super-slim brand alongside the locally developed JUARA line.
Plant construction followed a 2023 investment agreement with Indonesian regulators
KT&G signed an agreement with Indonesia's Investment Coordinating Board (BKPM) in September 2023, broke ground in April 2024, and began trial production in the first half of 2026 before reaching stable output this month. Output from the new line will supply not only Indonesia's domestic market but export destinations including Taiwan, Mongolia, Nigeria and India, positioning the plant as a logistics hub between the Pacific and Indian Oceans.
Overseas CAPEX program nears KRW 2.4 trillion completion mark
The Indonesia plant is the final major component of a growth investment plan KT&G launched in January 2023, following the completion of a new Kazakhstan facility in April 2025. The company has now executed the bulk of its KRW 2.4 trillion overseas capital expenditure program, first disclosed in November 2024.
Management said the improved balance sheet would support continued shareholder returns through share buybacks, cancellations and higher dividend payouts.
Combined overseas capacity set to hit 65 billion sticks by 2028
KT&G's four overseas bases in Indonesia, Russia, Kazakhstan and Türkiye are projected to reach a combined annual capacity of up to 65 billion sticks. The company aims to raise overseas production to more than 60% of total output by 2028, citing economies of scale and logistics efficiency gains.
"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,