Targeting the Asia-Pacific market: Indonesia Tobacco invested $166.1 million to build a factory for

Indonesian tobacco company HM Sampoerna invested $166.1 million to provide tobacco production facilities for IQOS' HEETS-branded cartridges, according to foreign media reports. The high-tech facility in Karawang, Waterbowa Province, Indonesia, will begin operations in the fourth quarter of 2022.

On November 1, 2022, Vassilis Gkatzelis made a public appearance in Sampoerna. "These production facilities will concentrate on supplying domestic and export markets in the Asia-Pacific region," he said. IQOS tobacco products commercialized under the HEETS brand will complement Sampoerna's product line for domestic sales, especially for exports in the Asia-Pacific region.

For Sampoerna holding company Philip Morris International (PMI), the new plant becomes the seventh in the world and second in Asia after South Korea.

In addition to being a major player in the country, Sampoerna became one of the cigarette manufacturers that continued to export. In the first nine months of 2021, Sampoerna was exported to about 40 destinations worldwide.

Vassilis said Indonesia is one of the most important components of PMI.

Since 2005, PMI and Sampoerna have invested more than $6 billion. Sampoerna's business size includes more than 65,000 direct and indirect employees in the Cigarette Production Division (MPS). Currently, the company's series products are produced in 44 factories, 6 of which are directly owned by Sampoerna and the remaining 38 are MPS. Its product range includes Sampoerna A, Dji Sam Soe and Marlboro Marlboro.

Vassilis said that the investment in tobacco products for IQOS highlights Indonesia's important country as a target for PMI investment. He believes that Indonesia has great potential to attract investment and become a target for domestic and international value creation. "Indonesia is an important investment target for us and we have high confidence in the country," he stressed.

The existence of the IQOS Tobacco Products Facility is also a form of PMI's global commitment to provide smokeless tobacco products as a better alternative. Vassilis believes that the best option for adults is not to smoke or quit. However, for the millions of adults who decide to continue consuming tobacco products, today's technology and science have made the development of various alternative products possible.

As we all know, in order to bring HEETS and IQOS to market, PMI has been conducting in-depth research for the past few years. PMI is committed to providing better alternative tobacco products to adult consumers. This study and technology investment found that by eliminating the burning or heating of tobacco products, harmful and potentially harmful substances were reduced by 90 to 95 percent compared to conventional cigarettes. IQOS offers a similar experience to traditional cigarettes, but with a significant reduction in harmful and potentially harmful substances.

Globally, IQOS shows a positive growth pattern. As of the end of the third quarter of 2022, IQOS had more than 19.5 million adult consumers. In addition, smokeless tobacco products researched and developed by PMI are available in 70 markets around the world.

In Indonesia, Sampoerna's marketing of IQOS is limited to or community-based platforms designed to gauge Indonesian consumer interest in IQOS. The IQOS community had 65,000 members by the end of 2021. This represents a 100% increase from the estimated 30,000 members at the end of 2020.