PT HM Sampoerna Tbk will close two kretek plants at the end of May and make about 4,900 employees redundant as popularity of the clove-flavoured smoke declines, said parent company Philip Morris International (PMI).

Plants in Jember and Lumajang, East Java, that produced hand-rolled kreteks will be shuttered on 31 May to restructure the hand-rolled kretek business. Both the overall kretek market and Sampoerna kretek brands have declined sharply, a trend PMI said it believed would continue. The closures reduce the number of Sampoerna hand-rolled kretek facilities to five, where more than 33,500 people are employed.
“This is an extremely difficult decision for management. We understand that this is unfortunate news for all of our employees, particularly those who are directly impacted in Jember and Lumajang SKT manufacturing facilities," the company said. "Those affected by this decision will receive severance package above legal requirements."
Indonesia's kretek market slumped to 23.1 per cent last year from 30.4 per cent in 2009. Kretek volume at Sampoerna fell 13 per cent in 2013. Cigarettes have upstaged the traditional mix of tobacco and cloves, the company said.