Buying Local Tobacco With High Prices, Government Appreciates PT Djarum Owned By Conglomerate Hartono Brothers

Illustration (Photo: Doc. Kemenperin)

JAKARTA - The government through the Ministry of Industry (Kemenperin) appreciates the tobacco products industry (IHT) business players who buy raw materials from local farmers at high prices.

Plt. The Director-General of Agro-Industry at the Ministry of Industry, Putu Juli Ardika, said that the support of entrepreneurs is very important to absorb tobacco produced by local farmers. He conveyed this when he visited the warehouses of PT Djarum and PT Gudang Garam in Temanggung, Central Java some time ago.

“These two companies have bought local farmers' tobacco at good prices. However, we continue to ask the IHT sector to further increase the purchase price and absorption of local tobacco in line with the current harvest time," he said as quoted by the official website, Sunday, September 19.

According to Putu, tobacco is a plant that is used as raw material for products from the IHT sector, such as kretek cigarettes, white cigarettes, cigars, klobot, sliced tobacco, cigars, and as raw materials for electric cigarette sticks and liquids.

"The status of tobacco land exploitation is dominated by smallholder plantations at 99.96 percent, the rest are large private plantations and large state plantations," he said.

Putu added that currently there are four provinces that have the largest tobacco plant populations, namely East Java, Central Java, West Java, and West Nusa Tenggara.

"The role of tobacco farmers in cultivating and processing tobacco plants to become industrial raw materials will determine the quality of the cigarette products produced," he said.

Meanwhile, the visit to the tobacco industry center conducted by Putu was intended as an assessment to the field to identify the problems that occurred and find the right solution in the future.

"We are also trying to bridge the gap between industry players and tobacco farmers so that they can continue to run their businesses in the midst of the COVID-19 pandemic," he said.

Just so you know, the tobacco industry and its processing have a fairly important role in the national economy. This sector is one of the fields of business that absorbs millions of workers.

Not only that, but the tobacco industry also plays a significant role in state revenue. In a previous report, the editor noted that throughout 2020, excise revenues from tobacco products reached Rp170.24 trillion or contributed 10.4 percent to the state budget.

In addition, Indonesia is the 6th largest exporter in the world for IHT products with a valuation of US$864 million.

Just so you know, one of the big players in the tobacco industry is PT Djarum, which is owned by the Hartono Brothers conglomerate. Through this business activity, Bambang and Robert Hartono have succeeded in establishing themselves as the richest people in Indonesia according to Forbes magazine and the Bloomberg Billionaires Index.

In fact, both business octopuses have spread to various fields. One of the most phenomenal is being the majority shareholder of PT Bank Central Asia Tbk. which last year posted a net profit of Rp27.1 trillion.