In this special issue on the subject around the hot topic of smoking, we meet Nugroho Widjaja, Cigar Marketing Officer at PT Djarum; a private manufacturer of tobacco clove founded in 1951.
Nugroho, could you please tell us a little about your business and that your operations day to day consist of?
PT Djarum was born in 1951 and is a family business, now in its third generation of the Hartono family. The company was built on hard work, innovation and research, and we have a research and development department to improve our products. We employ 65,000 people; 60,000 are tukang fluffing based plant Kudus, Central Java, and 5,000 are in sales, operations and marketing, with our offices in Jakarta. We are the third largest tobacco company in Indonesia Sampoerna and Gudang Garam after.
My job is to show that PT Djarum cigars can do with top quality like a Cuban cigar. On a daily basis, I check the distribution channels, research on future events are appropriate to sponsor, and I also checks on production and inventories.
Where does the name 'Dos Hermanos' come from?
Dos Hermanos is a Spanish name that means "brothers". That came names of our owners, who are brothers; Michael Bambang Hartono and Robert Budi Hartono Mr.
People often refer to you as "the guy Dos Hermanos". How did you manage to get to this position? Tell us about your trip and how long you worked for PT Djarum.
My journey began when I graduated in 1987 at the University Satya Wacana in Salatiga, Central Java, with a degree in management. A friend of mine worked at PT Djarum in Jakarta and I moved here to apply for a position as a market researcher to society. This was in 1988 and since I switched to the distribution and export, spent two years in Kuala Lumpur.
In 1995, the owners wanted to start making cigars, traveling to Honduras in search, bringing with them the knowledge Kudus where the formula Dos Hermanos was born. I have now been with PT Djarum for 25 years, and 14 of those years focused on the cigar business.
Can you please tell us how the PT Djarum income of Dos Hermanos?
In fact, the cigar business contributes only 5% of all revenues of PT Djarum.
How does PT Djarum cigars produce a year? Who makes the main bulk of your buyers - Expatriates or Indonesians
We produce about 100,000 cigars Dos Hermanos and nearly 300,000 Gold Seal packs each year. 90% are sold in Jakarta and Bali, mainly expats (90%). Our target market is expatriates living in Indonesia, so I'm good relations with key actors of expatriates because they make a lot of events that are tailored to our market.
Do you export, and if so, where? How was the response?
We tried to export to the US market, but failed as we were competing with the Dominican cigars. At present, we export Gold Seal in Europe - Germany, Austria, Poland - and Japan. We do not export Dos Hermanos.
How do you see the Indonesian cigar market do in the next two to five years?
I think there will be a growing market because people are becoming more health conscious and are generally smoked cigars on occasion, and not inhaled.
What do you think makes Indonesian cigars as good as or better than Cuban cigars
It is very difficult for Dos Hermanos compete with cigars Cuban ?; the world still knows Indonesia as a producer of clove cigarettes, not cigars. Cuban cigars are full-bodied and Dos Hermanos cigars are mild.
Can you tell us about the manufacturing process of Dos Hermanos rolled cigars by hand? ? And your first machine-made (Gold Seal) cigars
We three brands: Kretek Djarum Cigarillos (cigarillos with clove as the load) by the machine, cigarillos Gold Seal (without nail clove) by machines and Dos Hermanos cigars are handmade. fine cigars consist of a filler, binder and packaging. For our cigars Dos Hermanos, we use local tobacco mixed with Bahia Brazil as filler, Bazuki tobacco leaf for the binder, and Deli, North Sumatra, which is the large sheet which is the envelope. It is very similar to our Gold Seal cigarillos, except leaf tobacco is cut off and the load is pure Bahia tobacco.
Have you ever published a brand of cigars that never took off? Is there a time of year where drops of sale?
No, we have no product that failed. Every drop of sales of the year around March and August when expatriates pulang kampung (go home for the holidays).
Do you smoke?
I am a cigar smoker, and I smoke a cigar or two in the office every day. My staff always said to me, "Siapa yang bakar Sampah?" (burning garbage?) Because of the smell of cigars I smoke.
What is your ultimate goal as a cigar marketing manager in your company?
To Dos Hermanos as well as a Cuban cigar improving production and marketing. We are targeting expatriates, so I'm going to all networking events, as Britcham and Amcham.
What plans are coming in the near future?
We intend to import electronic cigarettes from China at the end of 2014, export to the United States first.
What do you think is the key to success in your industry and in Indonesia
Only three companies have much in Indonesia: PT Djarum, Wismilak Tbk and PT Tarumartani. We do a lot of promotional activities and other companies depend only on their distribution channel. Cigar is niche market and more a way of life.
What are your personal drivers to succeed?
I love to meet people and to negotiate with them, especially sponsorship deals. My family is important to me, even though my wife does not like the smell of cigars! I have a son and a daughter, aged six and five.