Sampoerna Once Again Expands Partnership with Local Entrepreneur in Karanganyar for Hand-Rolled Kretek Cigarettes Production

A concrete contribution from Sampoerna to foster national economic growth through absorption of thousands of workforces and multiplier effect creation in various regions

Karanganyar, 27 March 2024 – PT HM Sampoerna Tbk. (Sampoerna/IDX: HMSP) once again expanded its partnership with local entrepreneurs through the opening of a new Third-Party Operator (TPO) production facility for hand-rolled kretek cigarettes (sigaret kretek tangan or SKT) in Jaten, Karanganyar Regency, Central Java, that was inaugurated on Wednesday (27/3/2024). In line with the SKT segment recovery, the inauguration of TPO Jaten is part of the realization of Sampoerna's workforce absorption plan for new TPO and SKT production facilities in various regencies/cities in Java in 2024. Owned and operated by PT Attin Sigaret Indonesia, TPO Jaten absorbs approximately 2,000 workforces.

When inaugurating TPO Jaten SKT factory directly, the Director of Technical and Excise Facilities, Directorate General of Customs and Excise, Ministry of Finance of the Republic of Indonesia, Iyan Rubiyanto, who on this occasion represented the Director General of Customs and Excise, expressed his appreciation for the opening of the new factory which is expected to have a positive impact on the regional and national economy, "We wish PT Attin Sigaret Indonesia congratulations and success on the inauguration of TPO Jaten in Karanganyar. We also appreciate Sampoerna for consistently partnering with local entrepreneurs and cooperatives, especially in increasing thousands of workforce absorption."

The SKT industry also brings about economic impact on the surrounding community and at the national level. "We hope that the opening of this TPO will continue to absorb workforce and create a multiplier effect on the surrounding economy. The sustainability of the industry is among the focus of the Directorate General of Customs and Excise, Ministry of Finance. Therefore, let's maintain economic sustainability as a positive impact of the SKT industry," he added.

The SKT segment has started to show signs of recovery since 2020 after experiencing a continuous decline in terms of market share from 37% in 2006 to 17% in 2019. With the support from the Government’s excise tax policy which considers employment absorption in the last 4 years, the SKT segment recorded a market share of 28% in 2023. Director of Sampoerna, Elvira Lianita said, “On behalf of Sampoerna and tens of thousands of SKT hand-rollers, I would like to express my gratitude for the concern and support of the Directorate General of Customs and Excise, which represents the Central Government in ensuring the sustainability of the tobacco industry, including protecting the SKT labor-intensive sector through various policies. I would also like to thank the support of the Regional Governments and their functional units to have facilitated our business activities.”

TPO Jaten is one of five new TPOs that officially started operations in the first quarter of 2024 and complements Sampoerna’s other new SKT partnerships in Cilacap, Purwodadi, and Kebumen Regencies in Central Java, as well as Bojonegoro Regency in East Java. Thus, in 2024, Sampoerna will have partnerships with 43 TPOs, all of which are owned and operated by local entrepreneurs and/or local cooperatives. A series of new workforce absorption this year brings the total number of Sampoerna's employees, directly and indirectly, to more than 90,000 employees, about 90% of whom are working in SKT production facilities.

"Hopefully the presence of TPO Jaten will have a positive impact on employees, the surrounding community, and Karanganyar Regency. We hope that, through Sampoerna's long-term investment commitment in Indonesia, which is realized among others through new factories opening, workforce absorption, and partnership expansion with local entrepreneurs and cooperative, then Sampoerna can continue to play a role in creating an inclusive and sustainable multiplier effect for the society at large," said Elvira.

The opening of TPO Jaten, which has absorbed thousands of new workers, will improve the welfare of its employees as well as become a driver for the surrounding economy. The owner of PT Attin Sigaret Indonesia, Sri Yatin, said, "The majority of these hand-rollers come from villages and areas around the factory in Karanganyar. Many are also part of the new workforce, working straight after completing middle school or high school. We also hope that the presence of TPO Jaten will bring benefits to the surrounding community because I see that many restaurants and new businesses have begun to open around the factory. We hope this will be a positive interaction and have multiple economic impacts," said Sri Yatin.

The inauguration of TPO Jaten strengthens Sampoerna's commitment to continue contributing to Indonesia's economic development. "In 2024, Sampoerna has been operating in Indonesia for 111 years. Since its establishment, we have consistently delivered on our commitment to play an active role in fostering national economic growth," concluded Elvira.


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 kretek 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 seven owned production facilities in Surabaya, Probolinggo, Malang, Pasuruan, and Karawang, 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”.

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Media Contact:
Reza Juniarshah
Head of Corporate Communications
PT HM Sampoerna Tbk.