Work stuff : Tobacco industries in Indonesia - a few figures

Dear blogger ;

Talking about tobacco industries in Indonesia become more interesting in this end of fiscal calendar. The production and the selling out figures has to be calculated carefully regarding to the new custom tax policy in the following year. Some company even has to slowdown they sales to match with the total custom tax labels they already bought for this fiscal calendar.

Another common strategy that many tobacco companies applied is to use different company name for different product/ product category. For example if one company produce 10 brands in 3 product categories, this company probably create 2 sister company under the different name for each of their product categories. With this strategy, they can reduce " tax by company " that applied to the company with large production capacity.

With growing numbers of smokers and advanced technology of this industry machinery, the tobacco company enjoy a lot of profit in Indonesia this year. Specially the BIG FIVE player that dominated nearly 81 % of total tobacco product distributed here. This big five is also members of GAPRI ( Tobacco Company Association ) that hold more than 50 company. This is the association for " legal " company. Not for " illegal " or " home industry " that probably reach the number of 300 company this year.

This is the sweet sector of this industry. But for the the tobacco farmer, is still a long and windy road. This is because the growth in the tobacco industry, did not enjoyed by them.

For example from 1971 to 2004, the tobacco product consumption growth nearly 6 times from 35 billion sticks to 202 billion sticks. But the growth of domestic tobacco leaves production is only 2,8 times from 57 thousand tons to 165 thousand tons. Tobacco Company is tends to import they tobacco leaves from foreign country. The price and the quality is always be an issues.

Some research to the tobacco farmer also came out with a sad numbers. Nearly 69 % of tobacco workers at the farm had only elementary or lower education grade. And 58 % live in a non hygienic house with low sanitary facility. For the owner of the farm is no better, 64 % had a low education level ( elementary or below ) and 42 % living in a bad housing estate.

Their income is also very low. The worker only paid 1,5 US dollar each day ( with exchange rate 1 US dollar to 10.000 rupiah ). With this low income, they barely can get adequate basic living needs. For the owner of the farm is also no better. With the risk of climate, damaged product, pest attack, and price fluctuation ; they only earn 100 US dollar each month for 4 month in a year. At the rest of the month, they had to find another source of income while they are keeping they tobacco plant at the good condition.

Is always like that, farmer in this country had to struggle for they live even when they product is sold out in the market.

Regards ;