KT&G's new Pasuruan plant puts more than half its planned overseas cigarette capacity in Indonesia
KT&G started full operation of a 21 billion-cigarette plant in East Java, lifting its Indonesian capacity to 35 billion cigarettes a year. Its 2028 goal of making over 60% of its cigarettes abroad also caps its Korean plants at about 77% of capacity.
The Investor · Invest desk
What happened
- Output from the new plant will go to the Indonesian market and to exports, with Taiwan, Mongolia, Nigeria and India named as destinations.
- KT&G is targeting 10 trillion won of sales in 2027, up from 6.58 trillion won in 2025.
- Construction began in April 2024, trial runs started in the first half of this year, and the plant recently reached stable production.
Why it matters
- Who has to decide decision With Bang calling the large overseas plant build complete, further growth in overseas volume has to come from filling lines KT&G already owns in Indonesia, Russia, Kazakhstan and Turkey.
- Who's exposed exposure Most of KT&G's planned overseas capacity now sits in one country, so its overseas targets depend heavily on how much the two Indonesian plants sell locally and ship out.
- What it limits constraint Any shortfall against the undated 65 billion overseas figure pushes the ceiling on Korean output lower still if the 60% goal is to hold.
Next story · Invest · 5d ago
Two brokerages see KT&G topping its 465.3 billion won quarterly profit recordOne report1 publisher
Measured against the rest of KT&G's plants, Indonesia's 35 billion cigarettes a year are about 54% of the 65 billion the company expects its four overseas plants to reach [18]. The older plant in Surabaya, at 14 billion [2][3], is now the smaller of the two. With Pasuruan's nine lines [5], Indonesia's capacity is 2.5 times what it was [20], and the country alone can make 62.5% as many cigarettes as KT&G's three plants in Korea [23].
Put the overseas and Korean figures together and KT&G would have 121 billion cigarettes of annual capacity, about 54% of it abroad [19]. The company aims to make more than 60% of its output overseas by 2028 [8]. Even with all four overseas plants at their full 65 billion, that share holds only if Korean output stays below about 43.3 billion cigarettes [15]. That is roughly 77% of the 56 billion the Korean plants can make [16].
The reports do not give Korean sales volumes, utilization at any plant, revenue per cigarette or what Pasuruan cost. A shrinking home market would explain the target, but the sources do not report one, so it remains an inference.
Suppose Indonesia fills up on exports to Taiwan, Mongolia, Nigeria and India [6] while Korea runs near full. Then the overseas share stalls near 54% [19]. Korean volume could instead fall, lifting the share by subtraction. A third case is that the 56 billion Korean figure [9] already includes idle lines, and then the target asks little new of those plants. I think the 2028 goal is a statement about Korea, or rather about the roughly 13 billion cigarettes a year of Korean capacity that has to sit unused or close if the plan works [17]. The idle-lines case is the counter-thesis, and only a utilization figure would settle it. Suppose KT&G reports more than 60% overseas while its Korean plants make more than 43 billion cigarettes. In that case its overseas count includes volume from outside these four plants, and this reading is wrong [15].
KT&G wants 10 trillion won of sales in 2027, up from 6.58 trillion won in 2025 [11]. The gap is about 3.42 trillion won, a 52% increase in two years [21]. It also wants half of 2027 sales to come from abroad [10]. On that target, half is 5 trillion won [22].
"With the new plant in Indonesia as the last step, KT&G has completed its large-scale overseas facility investment and built a 'global five-point production system' that will serve as a solid foundation for its global business and future growth," President Bang Kyung-man said [14]. For cash flow, the key word is "completed". The businesses KT&G said it will strengthen are heat-not-burn products and health functional food [13]. Conventional cigarettes still bring in about 90% of sales, and heat-not-burn the other 10% [12].
What to watch
- KT&G's 2027 results against the 10 trillion won sales target and its goal of taking half of sales from abroad.
- Export volumes from Pasuruan to Taiwan, Mongolia, Nigeria and India, the first evidence of how fast the new lines fill.
- Any KT&G move to close or convert Korean lines would show how it means to handle the capacity the 2028 goal leaves idle.
Information, not investment advice. This story is general information about companies and markets, drawn from cited reporting. It is not a recommendation to buy, sell or hold any security; check the cited sources before acting.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence62
- Adoption
- Not scored
- Hype gap+15
- Incentives70
- Confidence64
Perspective Coverage
4 publishers- Builder
- Builder 10%
- Operator
- Operator 41%
- Investor
- Investor 49%
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
KT&G said on Oct. 7 it had begun full operation of a new cigarette plant in Pasuruan, East Java, Indonesia, after an opening ceremony there on Oct. 6.
- [2]
KT&G's existing first plant in Indonesia has capacity of 14 billion cigarettes a year; combined with the new plant, KT&G can make up to 35 billion cigarettes a year in Indonesia.
- [3]
KT&G's first tobacco manufacturing plant in Indonesia is in Surabaya.
- [4]
KT&G expects combined maximum capacity at its four overseas plants, in Indonesia, Russia, Kazakhstan and Turkey, to reach 65 billion cigarettes a year, without specifying when that target would be reached.
- [5]
The new Pasuruan plant will eventually house nine cigarette manufacturing lines and can produce up to 21 billion cigarettes a year.
- [6]
Output will serve both the local market and exports; KT&G plans to ship products to Taiwan, Mongolia, Nigeria and India.
- [7]
Construction of the Pasuruan plant began in April 2024, trial runs started in the first half of this year, and the plant recently entered stable production, the company said.
- [8]
KT&G aims to lift overseas output to more than 60% of total production by 2028.
- [9]
KT&G's three domestic plants have a combined annual production capacity of 56 billion cigarettes.
- [10]
KT&G aims to generate half of its sales overseas in 2027.
- [11]
KT&G is targeting sales of 10 trillion won next year (2027), up from 6.58 trillion won in 2025.
- [12]
KT&G generates about 90 percent of its total sales from its conventional cigarette business and the remaining 10 percent from heat-not-burn products.
- [13]
While maintaining its focus on conventional cigarettes, KT&G said it will strengthen its heat-not-burn and health functional food businesses.
- [14]
"With the new plant in Indonesia as the last step, KT&G has completed its large-scale overseas facility investment and built a 'global five-point production system' that will serve as a solid foundation for its global business and future growth," President Bang said.
- [15]
For overseas output to exceed 60% of the total with overseas plants at a full 65 billion, Korean output must stay below about 43.3 billion cigarettes a year.
- [16]
A 43.3 billion Korean output ceiling is about 77% of Korea's 56 billion capacity.
- [17]
At least about 12.7 billion cigarettes a year of Korean capacity would have to go unused (or be closed) for the 60% overseas goal to hold.
- [18]
Indonesia's 35 billion cigarettes of capacity are about 54% of KT&G's planned 65 billion overseas capacity.
- [19]
KT&G's combined planned capacity is 121 billion cigarettes a year, about 54% of it overseas.
- [20]
Indonesian capacity is 2.5 times its level before the Pasuruan plant.
- [21]
The 2027 sales target is about 3.42 trillion won, or 52%, above 2025 sales.
- [22]
Half of a 10 trillion won sales target is 5 trillion won of overseas sales.
- [23]
KT&G's Indonesian capacity equals 62.5% of its Korean capacity.
Sources
3 independent publishers whose own reporting we read for this story.
- en.sedaily.comKT&G Starts Up New Indonesia Plant, Its Largest Overseas Base
1 article · October 6, 2026
- en.yna.co.krKT&G's No. 2 plant in Indonesia begins operations
1 article · October 6, 2026
- koreaherald.comKT&G opens Indonesian plant to expand global output
1 article · October 6, 2026
- koreajoongangdaily.comKT&G opens second Indonesia plant to expand Southeast Asia tobacco exports
1 article · October 6, 2026
Topics and entities
Topics
- Tobacco and nicotine industry
- Overseas manufacturing expansion
- Heat-not-burn tobacco