5 Largest and Most Popular Cigarette Companies in Indonesia

The 5 Largest and Most Popular Cigarette Companies in Indonesia . Cigarettes are products made from tobacco and are widely consumed by people in Indonesia and around the world. Although it is not recommended that everyone consume cigarette, in fact this is one of the largest contributors to the Indonesian state budget, Indonesian cigarette companies contribute around US $ 153 trillion for Indonesia. Many of the largest cigarette companies in Indonesia are producing cigarettes and bringing profits to the country through various businesses.

In this article I will provide information about the 6 largest cigarette companies in Indonesia. Although I do not mention many other cigarette companies, here is a list of the largest cigarette companies in Indonesia in the world.

1. PT HM Sampoerna

PT Hanjaya Mandala Sampoerna Tbk. HM, renamed HM Sampoerna, is one of the kings of the Indonesian cigarette industry. This company has a complicated past, before being successful and popular until recently.

This history begins with a Chinese immigrant, Lim Sing Tee, who came to Surabaya with his father. In 1912, Lim married Siem Tjiang Nio, and then started a cottage industry in the old city of Surabaya, engaged in cigarette production. Lin peddled tobacco products by bicycle in Surabaya.

After successfully raising funds, they bought a former warehouse for a 1.5 hectare orphanage and turned it into a tobacco processing factory. Sampoerna’s history began in this small factory. The factory is now the home of San Baolin in Surabaya.

In 1930, the Lim Sing Tee family business changed, and NVBM Handel Maatschapij Sampoerna was officially chosen as the company name. A quality product is the famous Dji Sam Soe (the product is still around today).

The arrival of Japan in Indonesia in 1942, and all the colonial plans that were carried out, resulted in the destruction of the Lin Sampo Company. Until the end of 1959, Lim Sing Tee’s son, Aga Sampoerna, continued to work in the cigarette business. This is the second generation of Sampoerna’s history.

At that time, seeing the popularity of kretek cigarettes in Indonesia, he decided to only produce kretek Finally, the company focuses on producing hand-rolled kretek cigarettes (SKT) by launching various products, one of which is named Sampoerna Kretek.

Putra Sampoerna continued Sampoerna’s history in 1978 and is the 3rd successor. This generation is making Samboling even bigger. In this generation, Sampoerna A Mild products were born, which became the backbone of the industry. This is the starting point for the manufacture of Sampoerna’s Mechanical Kretek Cigarettes (SKM).

In 2001, Michael Sampoerna continued to lead Sampoerna. Until the end of 2005, the multinational tobacco company Philip Morris International Inc acquired a majority stake in PT HM Sampoerna. To this day.

Examples of cigarettes produced sampurna;

  • Dji Sam Sooe
  • Sampooerna Kretek
  • Sampooerna Pas
  • Sampooerna Tegar
  • Panamaas 1
  • Dji Sam Soe Magnum Filter
  • Sampoerna U Bold
  • Sampoerna Classics
  • A Mild
  • A Gold
  • U Mild
  • Vegas Mild
  • Trend Mild
  • Dji Sam Soe Magnum Blue
  • A Slims
  • A Volution
  • Marlboro

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  1. PT Bentoel International Investama Tbk

For more than 80 years, PT Bentoel International Investment Consulting Company (RMBA) has continued to adapt to the challenges of the development of the cigarette and tobacco industry. An unmitigated RMBA will be transformed by investing heavily in technology to improve its basic performance.

In terms of business history, Bentoel was founded by Ong Hok Liong in 1930 under the name Strootjes Fabriek Ong Hok Liong. The company started producing famous hand-rolled kretek cigarettes such as Tali Jagat, Bintang Buana, Sejati, Neo Mild and Uno Mild.

Then in 1954, the cigarette company changed its name to PT Tjap Bentoel Cigarette Company. Due to the rapid development of the cigarette business and changes in regulations, its name was changed to PT Bentoel Internasional Investama Tbk in 2000. This name change also indicates that Bentoel has merged and reorganized its management in terms of efficiency.

Its 16 subsidiaries are reduced to 4 companies, with the parent company responsible for coordination, while the subsidiary companies are responsible for the production and distribution processes. Then, in 2009, British American Tobacco Plc completed offering the remaining public sale of RMBA, thus controlling 99.74% of Bentoel’s shares, with a transaction value of Rp 5.1 trillion.

However, since the last 6 years, the company has continued to record losses. In 2012, losses attributed to the owners of the parent company amounted to Rp. 323 billion and continued to increase until 2016 to Rp. 2.08 trillion. However, since then, Bentoel’s net loss began to fall by 480 billion rupiah in 2017 and increased 26.74% year-on-year to 608.46 billion rupiah in 2018.

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Iwan Kendrawaran Kaldjat, Head of Government Affairs of RMBA, said that when Bentoel recorded a net loss, the company did not receive financial assistance from banks or a consortium. “Therefore, the only way to survive is to borrow from the group, namely by buying British American Tobacco for 13.2 trillion rupiah.”

Then in 2016, Bentoll conducted a limited public offering and share rationing, in which all loan lines were repaid and converted into shares. The British American Tobacco Group’s participation in the allotment reached Rp. 13.2 trillion, so that during the 2010-2018 period, the total investment of the British American Tobacco Group in the form of investment in Indonesia reached Rp. 18.3 trillion. A detailed introduction to the acquisition value of Bentoel in the 2009 and 2016 allotments.

The related transaction converts loans (loans) to equity as a commitment to the continuity of Bentoel’s business, while increasing opportunities to add global brands such as Lucky Strike and Dunhill.

According to Iwan, the funds were used as working capital to improve technology, namely moving the Dry Ice Expanded Tobacco (DIET) factory from Malaysia to Indonesia. So far, the total assets of the RMB have continued to grow substantially in 2018 reaching IDR 14.9 trillion.

Head of Operations of Bentoel Adhe Sona said, Bentoel Group currently has 7 factories in Malang, including Bentoel Internasional Investama and the DIET tobacco factory. The two factories are export-oriented and are exported to 19 countries with an export value of Rp 1.6 trillion.

Bentoel’s factory specializes in the production of machine-made kretek cigarettes (SKM), which are machine-processed cigarettes that combine tobacco and cloves. Products in this category are Dunhill Filter, Dunhill Mild, Lucky Strike Bold and Lucky Strike Mild.

Adhe explained that the Bentoel factory could produce more than tens of billions of sticks a year. In the future, RMB is expected to become the export center of Bentoel Group.

Andi Wongso, DIET’s director of operations, explained that the nicotine tar produced by the DIET factory contains low tar. He said: “The products of Bentoel factories are of world quality because their products can enter the Japanese and Korean markets, while the Japanese and Korean markets adopt high standards and regulations regarding tobacco products.”

Andy said the DIET factory utilization rate has reached 92%, and most of the products exported to 16 countries / regions in the Asia Pacific and Middle East region are related to British American Tobacco.

The entire process of implementing the operational activities of the Bentoel factory is supported by approximately 6,000 employees throughout Indonesia. Until the end of last year, Bentul’s contribution to consumption tax and value added tax increased from year to year. In 2017, consumption tax revenue was RMB amounting to Rp.14.0 trillion, and in 2018 it was Rp.14.1 trillion.

When the financial reports were released in the first quarter of 2019, RMBA sales in the first quarter of 2019 increased by 9.04% year-on-year to IDR 5.04 trillion. The loss in the first quarter of 2019 was still IDR 70.6 billion. The RMB is optimistic that it will generate profits in 2019 and improve on the net losses of previous years.

Some of Bentoel’s cigarette products:

  • Bintang Buana Raya and Filter
  • Universe Ropes and Filters
  • True
  • Joged
  • Rawit
  • Prins1p
  • Blue and Slim Bentoel
  • Dunhill Filter
  • Star Mild
  • neO, unO, One, Club Mild
  • X Mild
  • Dunhill Mild
  • Lucky Strike
  • Country
  • Ardath
  • Pall Mall
  1. PT Djarum

Who doesn’t know PT Djarum? The company is listed 69 years old and still has a solid position. From a historical perspective, Djelem’s position could not be separated from the cold hands of Dajiang Wiguan.

During the independence era, Oei Wie developed close ties with the fighters, and he opened a military cigarette business. Oei Wie Gwan is a businessman from Rembang, Central Java.

Oei Wie started to develop his own business through extensive involvement in this area. From processed tobacco, seasoning to marketing.

On April 21, 1951, the Djarum Cigarette Company was established as a legal entity

As an independent company. The final product includes four brands, namely Djarum, Merata, Magic Box, and Kembang Tanjung, all of which are Hand-made Kretek Cigarettes (SKT).

In 1955, the company began to expand its business by adding two production locations for other Djarum products (namely klobot cigarettes). In 1962, business expansion was carried out again and production sites were added, resulting in an annual output of 329 million pieces.

However, Djarum’s development was hampered. In 1963, after expanding the production base, the factory was set on fire. the same year

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Oie Wie Gwan died in Semarang without knowing that his factory had caught fire. In the end, there is only one place left, namely Kliwon in Kudus Regency. All production was transferred there, and a few years later all activities shifted back to Kudus Regency.

Oie Wie Gwan did not give the name Djarum, but stuck to the factory he bought. The djarum mentioned here is the needle on the old gramophone phonograph. Then under the leadership of two brothers, Bambang and Budi Hartono, business development began in 1963.

Together with Djarum’s loyal employees, they built the remains of the fire, enabling them to survive the critical period from 1965 to 1966. In 1967 the product expansion was carried out and the first merger was the addition of Ir. Julius Hadinata to Djarum.

As a Dutch graduate, Julius has made a lot of progress. Initially, there was a clear division of tasks, machines with new technology imported from England and West Germany were mainly used for tobacco processing, and several professional managers were appointed. In the same year, production increased threefold (from 1965). In 1968, with the expansion of two production bases, new products were launched under the names Admiral and VIP Blue. With the first breakthrough, the total sales output reached around 3 billion units.

Two years later, several new product brands emerged, such as VIP President, VIP International, VIP Agung, VIP Diplomat, VIP Sudan, Granat and Nahkoda. In 1973 Djarum began to participate in export activities, including exports to the United States, Saudi Arabia, Japan, Singapore and Malaysia.

In 1976, people’s preference for machine-made kretek cigarettes (SKM) began to change consumer tastes. Djarum also anticipates changes in consumer tastes by launching the Djarum Filter Special, Djarum Filter Deluxe and Djarum Filter King Size.

Two years later, the Djarum Super was launched, which is today’s popular filter kretek. The rapid consumer demand for Djarum products has driven the growth of the mechanical process and has also increased the production of hand-rolled kretek (SKT) cigarettes.

Currently, Djarum’s SKM and SKT products have become one of the suppliers with the largest cigarette market share in Indonesia. success

This prompted Djarum to take development steps such as increasing production, company performance and product innovation, so as to become at the forefront of the cigarette industry. In 1983, Djarum was changed to PT (Limited Liability Company).

The currency crisis occurred in 1998. However, PT Djarum began to expand in the banking sector. BCA, which is managed by the Indonesian Bank Restructuring Agency (IBRA), was eventually acquired by PT Djarum after losing control of Liem Sioe Liong. The Djarum Group owns up to 51% of BCA shares. BCA is the largest private bank in Indonesia, and is the second most profitable bank (after Bank Mandiri) and the third largest asset bank (after BRI and Bank Mandiri).

Some of Djarum’s cigarette products:

  • Djarum 76
  • Djarum BLACK
  • Djarum Chocolate
  • Djarum Super
  • LA Lights

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  1. PT Gudang Garam Tbk

Surya Wonowidjojo started working at his uncle’s cigarette company and was able to build a giant cigarette factory in Indonesia, namely Gudang Garam. Around 1920, Surya moved from Fujian, China to the three states of Madura (Sampang). At the age of 20, he worked at the Cap 93 cigarette factory owned by his uncle Tjoa Kok Tjiang.

Armed with experience and knowledge in the world of work, Surya dared to set up his own cigarette company at the age of 35. The Surya factory is located on Jalan Semampir II / l in Kediri with an area of ​​approximately 1,000 square meters.

At that time, the Surya Cigarette Factory was still named Inghwie after the name of the klobot cigarettes it produced. Two years later, Inghwie changed its name to Tjap Gudang Garam Cigarette Company. The Gudang Garam logo was chosen by two buildings located near the Tjap 93 cigarette factory where Tjaa previously worked, and it happens that Tjoa is next to the railroad tracks.

Surya is a figure with high professional ethics in leading Gudang Garam. He often worked hard until he came home late at night. He is also known for his innovation in setting up production units in the Gurah area in the 1960s. His decision to produce Klobot-rolled kretek cigarettes or SKL was very appropriate because of the rapidly growing demand.

The Gudang Garam business continued to grow in 1969 and added to its category. Judging from the size of the home industry, its status has been changed to become a company. Its business continued to grow, so that in just two years, the company established a limited liability company (PT).

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Surya led the company until he turned a blind eye in 1984. After his death, the leadership of the company was taken over by Rjoman Halim, the older brother of Susilo Wonowidjojo, the current president of Gudang Garam Tbk.

In 1990, GG was able to record its own story through the JKT stock market and the SBY stock market, thus changing its identity to become a public company. At that time, Gudang Garam issued 57,807,800 shares, each with a value of Rp1,000.

Currently, the main shares of PT Suryaduta Investama and Gudang Garam have shrunk 69.29%, and PT Surya Mitra Kusuma has shrunk 6.26%. The rest is owned by Susilo himself, namely 0.09% and Juni Setiawati Wonowidjojo with 0.58% and 23.78% respectively.

Some of Gudang Garam cigarette products:

  • Gudang Garam Merah, Djaja, Gold
  • Gudang Garam Special Deluxe, Halim, Mini Filter, King Size
  • Surya Professional and Exclusive
  • Gudang Garam Surya, International, Signature, Menthol, Nusantara
  • GG Mild and Shiver
  • Surya Mild, Menthol, Professional Mild
  • Salt Warehouse Deluxe Mild
  • Surya Slims
  • Klobot Kretek Cigarettes
  • Gudang Garam Klobo
  1. Wismilak Group

For this cigarette company from Surabaya, East Java, 2012 is a historic moment. PT Wismilak Inti Makmur Tbk (WIIM) issued shares and went public on December 18, 2012.

This cigarette company has been around for more than half a century. PT Wismilak Inti Makmur Tbk is the holding company of PT Gelora Djaja and PT Gawih Jaya. Well, PT Gelora Djaja was originally the Wismilak Group. A handmade cigarette factory was founded in Petemon, Surabaya by Lie Koen Lie, Tjioe Ing Hien, Tjioe Ing Hwa and Oei Bian Hok.

One of the products produced by Gelora Djaja is the Galan brand cigarette which was released in September 1962. Then, in 1963, PT Gelora Djaja produced the Wismilak Special Kretek cigarette. The company’s growing business encouraged PT Gawih Jaya to be established in 1983. This business is engaged in the marketing and distribution of Wismilak cigarette products. The word Gawih comes from Galan-Wismilak-Hidup Fertile. Well, these three words come from the first three cigarette brands PT Gelora Djaja. PT Gelora Djaja also started producing machine-made kretek cigarettes (SKM) in 1987.

In addition, in 1989, Messim Kratek (SKM) cigarettes in black and premium packaging became the trademark of the Wismilak Diplomat brand. In 1994, the company established PT Wismilak Inti Makmur and became the holding company of PT Gelora Djaja and PT Gawih Jaya. The establishment of this business was one of the plans to issue shares to the public in 1995. However, the plan to release shares to the public at that time could not be implemented.

In addition, the company also operates cigarette filters and OPP sheets which are sold to PT Gelora Djaja and other companies. PT Wismilak Inti Makmur Tbk started producing conventional filter rods in 2006. This is one of the supporting ingredients for smoking.

The company also decided to issue its initial shares to the public in 2012 and became a cigarette issuer on the Indonesian capital market.

The company issued 629.6 million new shares, representing approximately 30% of the paid-up and issued capital. The initial share price was set at Rp 650 per share. PT Wismilak Inti Makmur Tbk raised IDR 409.47 billion through an initial public offering. The proceeds from the initial public offering are used for capital expenditures, working capital and bank loan repayments.

Currently, the company has five production facilities, four regional logistics centers, 19 distribution areas, two stocking points, and 30 agents. The company noted that 63 percent of cigarette sales came from machine-made kretek (SKM) cigarettes, and SKT cigarettes contributed around 37 percent of the company’s sales.

Unfortunately, the company’s performance in the first three months of 2019 was less than encouraging. Based on records, in the first three months of 2019, the current total profit attributable to the owners of the parent company decreased by 49.37% from Rp 10.4 billion in the same period last year to Rp 5.26 billion. As of March 2019, the company’s sales decreased slightly by 7.9% to IDR 312.33 billion. Based on the records, the company’s total assets increased by Rp 1.31 trillion to Rp 1.25 trillion on March 31, 2019 compared to December 31, 2018.

Some of Wismilak’s products;

  • Wismilak Special and Slim
  • Wismilak Dirgha
  • Kretek and Slim Galan
  • Wismilak Diplomat
  • Galan Filter International and Galan Mild
  • Wismilak Diplomat Mild and Menthol
  • Wismilak Diplomat Impact and Evo
  • Fun Mild
  • Wismilak Premium Cigar Cigars