The Ministry Of Industry Reveals Millions Of People Depending On The Tobacco Products Industry Sector

JAKARTA - The tobacco ecosystem in Indonesia has been formed since the Dutch colonial era. Starting from tobacco farmers, tobacco competitions, clove farmers, cigarette factory workers, hawkers, retailers, distributors to exporters have become part of the chain of the tobacco ecosystem.

Director General of Agro Industry of the Ministry of Industry Putu Juli Ardika said, millions of people depend on the tobacco products industry (IHT) sector, ranging from tobacco farmers, tobacco competitions, clove farmers, cigarette factory workers, hawkers, retailers, distributors to exporters.

"With the establishment of a strong ecosystem, the structure of the tobacco products industry (IHT) in Indonesia has also been integrated. In fact, to date, millions of people have depended on the IHT sector," Putu said as quoted from his written statement, Wednesday, June 4.

The integrated IHT sector in the country is due to its already having a tobacco drying industry, cigarette paper industry, cigarette filter industry, cigarette spice/perse industry, hand kretek cigarettes industry, machine kretek industry, white cigarette industry, cigar industry, international scale laboratories to the packaging and printing services industry that supports IHT.

"The IHT sector plays an important role in the national economy," he said.

This, for example, is reflected in the contribution of tobacco excise results which will reach IDR 216 trillion in 2024, as well as being one of the largest contributors to state revenues from the industrial sector.

"In addition, the IHT sector absorbs 6 million workers from upstream to downstream, ranging from tobacco and clove farmers, factory workers, distributors to traders and exporters," said Putu.

As for the international trade sector, exports of Indonesian tobacco products in 2024 will reach US$1.7 billion, an increase of 21.7 percent compared to the previous year.

Indonesia also now occupies the sixth position as the largest exporter of tobacco products in the world.

"This success is inseparable from the quality of high competitive products and the hard work of all national tobacco business actors," he said.

However, challenges also continue to be faced by the IHT sector, especially the rampant circulation of illegal cigarettes. Data from the Ministry of Finance (Kemenkeu) noted that the increase in the circulation of illegal cigarettes from 3.3 percent in 2019 to 6.9 percent throughout 2023.

"The government emphasizes the importance of fostering and supervising all business actors in order to carry out activities in accordance with applicable regulations," said Putu.