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Jakarta Post

Land acquisition almost complete for Gudang Garam’s Kediri airport

  • Riska Rahman

    The Jakarta Post

JAKARTA   /   Tue, August 27, 2019   /   03:51 pm
Land acquisition almost complete for Gudang Garam’s Kediri airport Illustration of a plane taking off over a runway. (Shutterstock/hxdyl)

Cigarette producer PT Gudang Garam has acquired almost all the land it needs to build its first-ever airport in Kediri, East Java.

Company director Istata Siddharta said on Tuesday that the publicly listed company had acquired about 90 percent of the land needed to build the airport, which will have a 3,000-meter long runway.

Although it had almost finished with the land-acquisition process, Istata said he could not predict when the construction would start.

“Building an airport is not as easy as it seems because there are some permits that we need to obtain before we can start the construction,” he told the press at the Indonesia Stock Exchange building in Jakarta.

The company expected the construction to take about three years to complete and that it would also build the related infrastructure such as road access to the airport through its latest subsidiary, PT Surya Kerta Agung.

Gudang Garam will use its own money to fund the construction but Istata declined to reveal how much the construction will cost the company.  Tempo earlier reported that the company would need between Rp 1 trillion (US$70.15 million) and Rp 10 trillion to build the airport.

Although the Kediri-based cigarette maker has moved into the infrastructure business, Istata said Gudang Garam had no intention of expanding its business in the segment.

“The infrastructure business’ contribution will be very small, and cigarette making will still be our core business,” he said