Issue link: https://read.dmtmag.com/i/1541387
48 tobaccoasia MANUFACTURING NEWS 制造新闻 The study found that 2023 imports could produce 60-80 billion cigarettes. Of these, 39 billion sticks were made by legitimate manufacturers—including 2 billion exported and untaxed—while nearly 41 billion sticks came from non-duty- paid production. FBR collection data confirms taxes on only 37 billion sticks, revealing a substantial revenue gap. Hodsman said, "Acetate tow provides a clear window into Pakistan's potential cigarette production capacity. The data shows a troubling mismatch between declared volumes and production potential." He warned that without targeted border enforcement and strict action against misdeclaration, illicit trade could continue expanding, undermining government revenue, harming legiti- mate businesses, and weakening the national economy. Indonesia Factory Grapples with Market Decline The tobacco industry is East Java's second-largest economic sector after food and beverage, but it faces challenges from illegal cigarettes and high excise taxes. Officials say tackling these problems requires coordinated efforts from both regional and central government agencies. East Java is Indonesia's main tobacco hub, generating more than IDR129 trillion ($7.1 billion) in excise revenue in 2023, over 60% of Indonesia's total. Gudang Garam, the largest cigarette factory in Kediri, recently implemented a restructuring program that includes offering early retirement to employees. In response to a viral video suggesting mass layoffs, the company clarified through the Indonesia Stock Exchange that it released 309 employees through normal retirement processes, voluntary early retire- ment, and the end of work contracts. "What happened was not a mass layoff, but rather a process of releasing 309 employees in a normative manner, through normal retirement mecha- nisms and voluntary early retirement, as well as the end of work contracts according to the work contract time limit," said director and corporate secretary Heru Budiman, according to IDXChannel.com. Market data from Nielsen shows total cigarette sales declined to 226.9 billion sticks in 2024. By year-end, Gudang Garam held a 17.4% domestic market share, down from 21.2%, and recorded IDR980 billion (US$54 million) in profit, compared with IDR5.3 trillion ($293 million) in 2023. The company employs 30,308 people in production, marketing, and distribution. Deputy governor Emil Elestianto Dardak said the restructuring reflects broader challenges in the tobacco industry, including illegal cigarette circulation. These lower- priced products reduce market share for legal cigarettes. Authorities are working to strengthen enforcement and curb the spread of illegal cigarettes.