Indonesia's illicit cigarette trade thrives as legal industry slumps

State excise duty revenue from tobacco sector falls for first time in 17 years

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Packs of illegal cigarettes made in East Java: The rising popularity of illicit tobacco products in Indonesia has damaged legal producers and reduced state revenue. (Photo by Belinda Yohana)

BELINDA YOHANA, Contributing writer

November 24, 2024 20:06 JST

MALANG, Indonesia -- Fajar, not his real name, runs a small cigarette factory on Madura island in Indonesia's East Java province.

The facility runs 24 hours a day, with a few dozen people working three eight-hour shifts to produce up to 80,000 machine-rolled cigarettes each day. With the business running so well, the 38-year-old entrepreneur is building a second factory in the city of Malang, also in East Java, for which he plans to hire about 20 workers.