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An empire built from a superstition
The Gudang Garam empire came to life under the leadership of its founder Surya Wonowidjojo, or Tjoa Jien Hwie, in June 1958
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The Gudang Garam empire came to life under the leadership of its founder Surya Wonowidjojo, or Tjoa Jien Hwie, in June 1958.
After gaining valuable experience working for his uncle's cigarette company, Surya set up his home business, Pabrik Rokok Tjap Gudang Garam, on a 1,000-square-meter plot of land in Kediri, East Java.
He initially employed only 50 people, most of them poached from his uncle's company. They produced about 50 million hand-rolled clove cigarettes during their first production year under the brand Gudang Garam (salt warehouse).
The idea for the name came after Surya had a dream about a salt warehouse located across from his uncle's Cap 93 cigarette company.
Surya shared his dream with his employees, and one of them suggested he put a picture of the warehouse on every cigarette pack for good luck.
And good luck it was indeed, with the company achieving a "firm" status ten years later and receiving a business loan for expansion from state-owned Bank Negara Indonesia (BNI).
In 1971, the company upgraded its legal status to a limited liability company to help enhance its production capacity and management. In 1979, it began investing in machines for rolling cigarettes.
Company pioneer Surya passed away in 1985 and left his business empire to his children: Rachman Halim, Juni Setiawati, Sumarto, Wurniati, Susilo, Sigit Sumargo and Sujati.
In 1990, the company was reportedly forced by former President Soeharto to sell some of its shares to the public and to list itself on the Indonesian Stock Exchange.
Although it is publicly listed, stock market analysts have complained about difficulties in accessing information from Gudang Garam.
A year after the listing, the company set up paper maker PT Surya Pamenang in Kediri to supply packaging material.
In 2002, the company issued several new products: Gudang Garam Signature, Gudang Garam Signature Menthol Mild and Gudang Garam Signature Mild.
It boasts a highly loyal middle to low-income customer base. At present, it owns 22 cigarette brands, 13 of which are sold overseas, including in Malaysia, Japan, Australia and France.
To help distribute the products, the company has branch offices in Jakarta, Surakarta and Surabaya, and representative offices in Brunei Darussalam, the Netherlands and Switzerland.
Today, Gudang Garam owns a 514-acre tobacco complex in Kediri. Although the company has sophisticated equipment, it still relies on its considerable workforce for production.
With a production capacity of 7 billion cigarettes annually, Gudang Garam employs more than 41,000 workers. (ewd)
