Sampoerna's commitment to long-term investment, industrial downstreaming, innovation, and workforce absorption in driving economic and social multiplier effects to support Indonesia's economic growth target of 8%
Surabaya, 13 December 2024 – PT HM Sampoerna Tbk. (Sampoerna/IDX: HMSP) inaugurated two new hand-rolled kretek cigarette (sigaret kretek tangan/SKT) manufacturing facilities in Blitar City, East Java and Tegal Regency, Central Java. The inauguration of the two factories is part of Sampoerna's investment in 2024, which previously also included expanding partnerships with 5 Third-Party Operators (TPOs) owned by local entrpreneurs and/or cooperatives in East Java and Central Java. With the additional investment, Sampoerna currently has 9 factories, including 6 SKT factories, partners with 43 MPS in various cities/regencies across Java, and overall employs more than 90,000 employees, both directly and indirectly, throughout Indonesia.
Minister of Investment and Downstream Industry/Chairman of the Investment Coordinating Board of the Republic of Indonesia Rosan Perkasa Roeslani simultaneously inaugurated Sampoerna’s SKT factories located in Blitar and Tegal in person online from the Sampoerna SKT Factory in Surabaya. He expressed his appreciation for Sampoerna's investment which has also succeeded in absorbing thousands of additional workforces. "Creating quality jobs is the Government's top priority. Sampoerna's role has been extraordinary and in line with our program. One thing I see and feel today is the enthusiasm, passion, and happiness of the workers, especially the female hand-rollers. This means that Sampoerna has done something right in improving the welfare of its employees," he said at the inauguration ceremony held in Surabaya (13/12/2024).
"In accordance with President Prabowo Subianto's message, our most important task is to maintain existing investments that has absorbed a large number of workers. Therefore, we will continue to provide support and facilities so that long-term investors such as Sampoerna can continue to invest and develop their businesses sustainably in Indonesia, especially since Sampoerna has exported its products to 30 export destinations in Asia Pacific," added Rosan.
"Sampoerna's presence has produced an extraordinary multiplier effect, covering farmers, micro, small, and medium enterprises (MSMEs), to local suppliers. I am sure that there are hundreds of thousands of people involved in Sampoerna's business chain, both directly and indirectly. Thus, Sampoerna contributes to economic growth, not only in East Java and Central Java, but also nationally," he said.
On the same occasion, Acting Governor of East Java Adhy Karyono also expressed his appreciation for Sampoerna's series of investments in 2024. "Congratulations and success to Sampoerna for the opening of two new SKT manufacturing facilities in Blitar and Tegal. This investment will increase the ability to absorb workforce while improving other economic sectors around the factories. East Java's unemployment rate is at a lower level than the national’s. The main contribution is thanks to Sampoerna’s SKT sector. I would like to express my gratitude because Sampoerna has contributed to the East Java Provincial Government, always ready if we need support so that they can also help reduce poverty," he said in his speech.
He also specifically appreciated the role of thousands of female workers in the SKT sector. "East Java contributes 60% of the country's total tobacco excise revenue. Every year we contribute Rp129 trillion. This is all thanks to the hard work of all the female workers here," said Adhy Karyono.
"As a company that has been operating for more than 111 years in Indonesia, we are committed to growing together with Indonesia and contributing to the achievement of the 8% economic growth target through sustainable investment, innovation, downstreaming, and workforce absorption. Our investment in the labor-intensive SKT sector is one of our efforts to realize this vision," said President Director of Sampoerna Ivan Cahyadi.
The opening of two SKT factories and the expansion of partnerships with five new TPOs in 2024 are the realization of Sampoerna's investment plan to increase workforce absorption. "Our new SKT factories in Blitar and Tegal will absorb more than 3,500 new workforces, of which 2,000 have started working now. Among Sampoerna's 90,000 workers, the majority are SKT employees who are dominated by great women," said Ivan.
As a company that started from the SKT sector in 1913, Sampoerna hopes that this investment can strengthen the company's portfolio in this sector. "In our operations, Sampoerna always prioritizes innovation in all lines to maintain business continuity and competitiveness, including in the SKT sector," said Ivan.
The SKT production facilities in Blitar and Tegal complement Sampoerna's 4 existing SKT factories in Surabaya, Malang, and Probolinggo, East Java. Like those four factories, Ivan said the existence of the Blitar and Tegal SKT factories will create a multiplier effect that can be felt by the surrounding community. This is evidenced by the many businesses that have emerged around the factory, ranging from grocery stores, food and beverages stalls, transportation services, to boarding houses.
"In addition, we believe this investment will also continue to maintain the absorption of tobacco and clove from Indonesian farmers. Hand-rolled cigarettes require twice as much tobacco and cloves as machine-made cigarettes. The factory inaugurated today is expected to have a positive impact on the progress of national downstreaming through the absorption of local raw materials to produce value-added products," said Ivan.
Ivan appreciates the Government's efforts to maintain a conducive and predictable business and investment climate in Indonesia, including policies that encourage the performance of the SKT labor-intensive sector. According to him, these efforts have a direct positive impact on job creation in the formal sector and local economic turnover which in turn helps improve the national economy.
"We are committed to actively playing a role in strengthening the pillars of the national economy. In the future, we hope to continue to grow together with Indonesia and contribute to economic development through sustainable investment, downstreaming, innovation, workforce absorption, and added value creation for the society at large," Ivan concluded.
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About PT HM Sampoerna Tbk. (Sampoerna)
Founded in 1913, Sampoerna – an affiliate of Philip Morris International Inc. – is the leading tobacco company in Indonesia. The scope of activities of the Company consists of manufacturing and trading cigarettes as well as smoke-free tobacco and nicotine-containing products. Sampoerna produces several well-known kretek brands such as Sampoerna A, the legendary “King of Kretek” Dji Sam Soe, and Sampoerna Kretek. Sampoerna also distributes Marlboro, the leading international cigarette brand, throughout Indonesia through a long-term distribution agreement with PT Philip Morris Indonesia.
Sampoerna operates nine owned production facilities in Surabaya, Pasuruan, Probolinggo, Malang, Karawang, Blitar, and Tegal, including a production facility to manufacture innovative smoke-free tobacco products focusing on export to Asia Pacific and the domestic market. Sampoerna also partners with 43 Third Party Operators all over Java and employs – directly and indirectly – more than 90,000 employees, mostly in the production of hand-rolled kretek cigarettes. Sampoerna distributes the product through 109 sales and distribution offices throughout Indonesia.
Sampoerna is a publicly listed company on the Indonesia Stock Exchange (IDX). Sampoerna's stocks are traded with code “HMSP”.
For more information, please visit: www.sampoerna.com
Media Contact:
Micko Rustantra
Head of Corporate Communications
PT HM Sampoerna Tbk.
Email: contact@sampoerna.com