Indonesia’s Signature Product

Posted on February 12th, 2010 at 3:21 pm by Akhyari


By Karim Raslan

Over the past few weeks, as Indonesians have bemoaned the state of their own industries that are seemingly crumbling in the face of China’s export machine, I’ve been on quest to write about uniquely Indonesian products. It has taken me from Bandung and Dendy Darman’s hyper-cool UNKL347 clothes line to Tumanggong and Pak Singgih Kartono’s eco-friendly wooden radios. Sadly, these tiny operations aren’t in themselves the solution to providing jobs to Indonesia’s burgeoning workforce.

However, there is one industry — kretek and cigarettes — that functions on a scale that would impress even the Chinese. It is also indelibly Indonesian.

 With every puff of a kretek, you are transported, wherever you are, to Java: an island rich in history, tradition and extraordinary beauty. Yes, I know it sounds corny but it’s true, and “Java” is much more evocative than the rain-sodden Scottish Highlands — the homeland of malt whisky! Indeed, there’s no reason why the humble Indonesian kretek can’t take its place alongside Cuban cigars, French claret wines, Scotch whisky and Mexican tequila as a luxury product that commands a premium in the global marketplace.

As it is, the industry’s size is phenomenal. It’s estimated that some 10 million people — tobacco and clove farmers, factory workers, traders and stall holders — earn their livelihood from making the cigarettes. The industry also contributes some 5.5 percent to the national budget, a source of government revenue that has increased from Rp 4 trillion ($428 million) in 1996 to well over Rp 40 trillion in 2009.

With that in mind, I’m in Mragen, Central Java’s lowland tobacco country. The terrain is flat and dusty, even in the rainy season. I am just over an hour away from Semarang, and the village roads are appalling: pot-holed and rutted. This is definitely not Marlboro country.

Instead I’m in a car, following a Javanese equivalent of the Philip Morris icon, Pak Suparman, as he leads us on his motorbike to his private godown.

Indeed, the deeply tanned, 56-year-old looks every bit the prosperous local tobacco farmer and buyer, or pengepul . Arriving at his nondescript store, he pulls open the metal doors to reveal a room some five meters high, stacked with tightly bound and graded Mragen tobacco — all of it aging gently. In a good year, he says, his store would be empty.

Whatever the case, the Mragen leaf is one of a handful of locally grown tobaccos along with those from Tumanggong, Bojonegoro, Madura, Muntilan and Madiun. They are blended along with the all-important clove to get that distinctive kick.

Of course, not all tobacco farmers are as successful as the mercurial Suparman. The dry season crop is a laborious taskmaster. It demands months of careful tending, fertilizer and weeks of delicate picking. However, on these parched and baking-hot coastal plains, tobacco is a godsend: a cash crop with a steady market. The alternatives — soybeans and peanuts — aren’t nearly as lucrative. Moreover, in these more health-conscious times, Mragen’s crop is also known for its slightly lower nicotine levels.

Pak Sutikno lives beside Suparman’s godown. He is a 60-year-old tobacco farmer, and he is at the very bottom of the kretek pyramid. Sutikno’s profit margins are slim.

Still, the village does have electricity and Sutikno is the proud owner of both a Chinese-made television and a table fan. For all the meager signs of progress, Sutikno is not a believer in education: “What’s the point of sending your kids to college? My next door neighbor has a degree but he can’t get a job. He’s become a farmer like me. It’s better to buy land than waste money on schooling.”

With an estimated 2.4 million tobacco farmers, most of whom hover on the verge of poverty, the government needs to think carefully about how it handles the kretek industry. Yes, it can — and no doubt will — levy more taxes on it.

However, kretek is special and it remains an ineluctably Indonesian “brand” with a value chain that is 100 percent local. The government has to make strategic decisions. Kretek producers need help, so they can expand their product abroad.

Sampoerna, Djarum and Gudang Garam can become pan-Asian, if not regional, giants, following in the footsteps of the Philippines’s San Miguel brand. They have the resources to grow their market and turn into export champions, mirroring the success of Sweden’s iconic vodka brand, Absolut.

What is needed is guts, ambition and vision. The Pak Sutiknos of Mragen can’t afford to wait much longer. (JG)

Karim Raslan is a columnist who divides his time between Malaysia and Indonesia.

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