Cigarette exports from Indonesia raked in a total of $931.6 million last year, accounting for a growth of 2.98 percent compared to the figures recorded in 2017.
According to The Jakarta Post, cigar industry minister Airlangga Hartanto said the country's cigarette excise reached Rp 153 trillion in 2018. The amount is around 3.9 percent higher than 2017's excise figures.
"Cigarette excise tax revenue contributed 95.8 percent of the national excise tax revenue," Airlangga said. Since Indonesia is one of the world's key players in producing cigars, the industry has helped boost the local economy through local sales and heavy orders overseas. The industry has also been promoting brands and flavors that cater to consumers who want to try new products.
Regarding health issues attributed to the process of manufacturing tobacco products, Airlangga said, "We will take employment and people's health into consideration." It is worth noting that Indonesia's cigar industry uses mostly raw materials such as clove and tobacco to ensure that its products are globally competitive. The use of raw materials is said to be part of Indonesia's efforts in easing concerns about the health risks involved with smoking cigarettes.
Furthermore, the government issued a set of regulations over the past five years in line with the country's goal of producing cigarettes that have reduced addictive ingredients. The regulations have also been established to provide a basis in cases related to the negative investment list.
In an interview with Asia Legal Business, S SEK Legal Consultants Managing Partner, Denny Rahmansyah said he is expecting to see increased growth in various sectors in the country, including the cigarette industry. He explained that growth will be largely affected by the government's oath of opening the country to foreign investors.
Among the sectors that Indonesia will further open up to overseas investments are e-commerce, oil and gas construction services, power plants, and the cigarette industry. This move is expected to boost the sector's developments in 2019 and beyond.
Meanwhile, the global cigarillos market has been predicted to spur significant growth by 2025. According to a new insights report by HTF Market Intelligence, one of the countries that will see huge growth in the next five years in Indonesia.
Indonesia is a key player in driving growth globally. The Asian country has been producing tobacco products for export and local sales over the past years. However, some critics pointed out that the Indonesian cigarette industry has lax regulations, resulting in increased health risks for people who smoke and those who are exposed to second-hand smoke.
