Gudang Garam to buy new factory

JAKARTA: Publicly-listed cigarette maker PT Gudang Garam said on Wednesday it planned to acquire a Rp 784 billion (US$75 million) factory owned by its affiliate PT Karyadibya Mahardika as part of an expansion program.

Gudang Garam said in a statement that the factory would be used to manufacture low tar and low nicotine clove blended cigarettes.

Company president Djajusman Suryowijono said the move would provide Gudang Garam with an edge to compete in the growing market.

The factory, which is nearing completion, will have a total capacity of 13 billion cigarettes annually. The company expects to launch its light cigarettes sometime this year.

Light cigarettes accounts for about 10 percent of the total clove blended cigarette output in Indonesia. -- JP