Djarum Asserts Rp 24 Trillion Overseas Investment is for Diversification
PT Djarum has responded to reports regarding the Hartono family’s investments of approximately Rp 24.64 trillion (US$1.4 billion) abroad. Djarum asserted that these investments are part of a diversification strategy and an effort to strengthen the tobacco industry’s supply chain, rather than an attempt to transfer assets out of the country.
Budi Darmawan, Manager of Corporate Communications at Djarum, explained that this corporate action involves the acquisition of two paper mills, SWM and Tantapier, since 202lar. The products from these companies are used for cigarette paper, filters, and tobacco product packaging.
Budi stated that these acquisitions strengthen Djarum’s business integration, including with other companies within the group in Indonesia. He emphasised that these actions have been underway since the presidency of Joko Widodo and were partially funded through foreign loans.
“This is part of the strategic step for Djarum’s tobacco industry to strengthen our lines. These acquisitions were carried out during President Jokowi’s era, between 2023 and 2024. Fortunately, by using foreign financing and loans, we have strengthened our operations,” said Budi.
Bloomberg reports had mentioned that at least nine entities in Singapore and London linked to the Hartono family have invested large sums abroad, including the acquisition of paper companies in the United States and Austria through Evergreen Hill Enterprise Pte Ltd, a subsidiary owned by the Hartono family.
Budi maintained that more than 90 per cent of Djarum’s business still operates in Indonesia. This demonstrates the Hartono family’s commitment to contributing to the national economy and the development of prosperity in Indonesia.
“Why is 90 per cent of the business in Indonesia? Because it is the ambition of our owners, Mr Budi Hartono and Mr Bambang Hartono, as citizens and people of Indonesia, to help build prosperity and wealth in this beloved country,” said Budi.
He added that Djarum’s business activities in Indonesia provide a wide positive impact, such as labour absorption and human resource development, as well as driving demand for raw materials and economic activity across various sectors.
Bloomberg’s report also highlighted the trend of overseas investment by major Indonesian entrepreneurs amidst uncertainty in the domestic business climate. Some entrepreneurs are expanding assets and businesses in other countries as a strategic move to face these conditions.
Laura Schwartz, Senior Asia Analyst at Verisk Maplecroft, stated that the increasing role of the government in the economy and an inconsistent approach towards business players are heightening investor concerns in Indonesia.
Since President Prabowo took office in October 20lar, there has been pressure from capital outflows affecting the rupiah exchange rate and the stock market, with global investors selling Indonesian shares amounting to nearly US$4 billion to date.
Several government policies, including changes to the Minister of Finance and the Governor of Bank Indonesia, as well as the consolidation of State-Owned Enterprises (SOEs) under a single structure by the Danantara investment management agency, have also become points of concern for investors regarding the growing government role in strategic sectors.
The government has stated its commitment to maintaining a fair and rule-based business climate for all investors and business actors. The Government Communications Agency emphasised its appreciation for the private sector’s role in investment, job creation, and national development.