Djarum

Djarum is an Indonesian cigarette manufacturer and diversified business group headquartered in Kudus, Central Java. Its core business is the production and marketing of kretek, the Indonesian style of cigarette that combines tobacco with cloves and flavoring. The company sells a broad portfolio of domestic and international cigarette brands, including Djarum Black, Djarum Super, and L.A. Lights. Its products have been distributed in Indonesia and overseas, and Djarum became especially visible in the United States during the clove-cigarette trend of the 1980s. The business began in 1951, when Oei Wie Gwan acquired NV Murup, a nearly defunct cigarette company in Kudus. NV Murup's best-known product was Djarum Gramofon, a name referring to a gramophone needle. Oei shortened the name to Djarum, meaning needle. The company suffered a major setback in 1963 when its factory was destroyed by fire, occurring around the time of Oei's death. His sons, Budi Hartono and Bambang Hartono, assumed control and rebuilt the business. Djarum initially relied heavily on hand-rolled kretek made by manual workers. From the late 1970s it also introduced machine-rolled production, allowing the company to expand volume while retaining hand-rolled products as part of its manufacturing tradition. During the 1980s and 1990s, Djarum broadened beyond cigarettes into sectors including food and beverages, banking, garments, technology, property, and other investments. This diversification transformed the company into one of Indonesia's major conglomerates. Its direct parent, PT Dwimuria Investama Andalan, is commonly associated with the wider Djarum Group. A central element of the group's financial presence is its controlling interest in Bank Central Asia, commonly known as BCA. Djarum became involved in the consortium that acquired the bank from Indonesia's government restructuring agency after the 1997 Asian financial crisis. The group later became BCA's majority shareholder. Other holdings and investments have included digital commerce, online travel, supermarkets, restaurants, consumer packaged goods, electronics, telecommunications infrastructure, agriculture, hotels, and shopping complexes. Examples associated with the wider group include Blibli, Tiket.com, Polytron, Grand Indonesia, Savoria Group, and HPI Agro. Djarum has also used sponsorship and ownership to build a public profile outside tobacco. PB Djarum, its badminton club, was founded in 1974 and has developed players who represented Indonesia at international level. The group has sponsored Indonesian football competitions, supported football development programs, and been connected with motorsport events. Through entertainment investments, it has also been associated with Como 1907 in Italy and the music company 88rising. The company has faced public-health and labor criticism. In the United States, flavored cigarettes were largely prohibited after the 2009 Family Smoking Prevention and Tobacco Control Act. Djarum's American clove products were subsequently marketed as filtered cigars and sold in black-paper packaging, reflecting a change in product classification and presentation. In 2016, Human Rights Watch named Djarum among Indonesian tobacco companies it said were implicated in the use of child labor and inadequate hand protection. Djarum remains active as a tobacco brand and as the flagship consumer-facing name of a much broader Indonesian business group.

Djarum traces its origins to 1951, when Oei Wie Gwan acquired NV Murup, a struggling cigarette company in Kudus, Central Java. NV Murup's principal brand was Djarum Gramofon, whose name referred to a gramophone needle. Oei shortened the brand to Djarum, or needle, creating the identity that later became associated with one of Indonesia's largest kretek producers. The early business was built around kretek, an Indonesian cigarette tradition combining tobacco and cloves. Production depended substantially on manual workers rolling cigarettes by hand. This method remained important even after the company expanded into machine production. A decisive crisis came in 1963, when a fire destroyed the factory. The disaster occurred around the time of Oei's death, leaving his sons Budi Hartono and Bambang Hartono to assume control and rebuild the company. Their reconstruction laid the foundation for Djarum's subsequent growth. During the late 1970s, Djarum added machine-rolled kretek to its manufacturing capabilities. The change enabled higher-volume production and supported the development of a larger portfolio, while hand-rolled products continued to be made. Brands such as Djarum Black, Djarum Super, and L.A. Lights became important parts of the company's domestic and international tobacco business. Djarum also gained recognition in the United States during the clove-cigarette fashion of the 1980s. From the 1980s through the 1990s, the business expanded beyond tobacco. Its activities came to include food, beverages, banking, garments, technology, and property. This diversification reflected the development of large Indonesian business groups and eventually made Djarum one of Indonesia's leading conglomerates. After the 1997 Asian financial crisis, Djarum participated in a consortium that acquired Bank Central Asia from the Indonesian government's bank-restructuring agency. BCA became the group's most important financial-sector asset, and Djarum later controlled a majority stake in the bank. Property development became another visible part of the group's activities. In 2004, Djarum obtained a 30-year build-operate-transfer contract to develop and renovate Hotel Indonesia in Jakarta. The project formed part of the Grand Indonesia superblock, which combined hotel, retail, and other commercial functions. The group subsequently became associated with additional property, hospitality, retail, consumer-goods, electronics, agricultural, and technology investments. Djarum's public presence has also been shaped by sports and entertainment. Budi Hartono founded PB Djarum in 1974. The badminton club became a significant training and competitive institution, with players connected to numerous Indonesian championships. Djarum sponsored Indonesia's leading football competition between 2005 and 2011 under successive Djarum-branded league names. The group has also supported Garuda Select, motorsport events including Djarum Superchallenge Super Prix and Djarum 76 Trial Game, and football activities connected with Como 1907 in Italy. In the United States, the 2009 federal tobacco law prohibited most flavored cigarettes. Djarum's clove products were subsequently sold as filtered cigars, with black-paper wrapping used in their presentation. The company has also faced labor and public-health scrutiny. Human Rights Watch identified Djarum among Indonesian tobacco companies it said were linked to child labor and inadequate hand protection in 2016. These controversies sit alongside the continuing commercial importance of tobacco to the group. In the broader Djarum Group, investments and operating interests have included BCA and the ALTO interbank network; Blibli and related businesses such as Tiket.com; supermarket and restaurant operations; consumer-goods producer Savoria Group; electronics manufacturer Polytron; properties including Grand Indonesia and Margo City; Padma Hotels and Resorts; plantation operator HPI Agro; telecommunications infrastructure; venture investments; and entertainment assets. Djarum therefore functions both as a cigarette brand and as the tobacco-origin business associated with a large, family-controlled Indonesian conglomerate.

• 2009

  United States product reclassification

  [1]Djarumen.wikipedia.org

  After United States restrictions on flavored cigarettes, Djarum's clove products were marketed there as filtered cigars.

• 2005

  Indonesian football league sponsorship begins

  [1]Djarumen.wikipedia.org

  Djarum became the principal sponsor of Indonesia's top football league.

• 2004

  Grand Indonesia development contract

  [1]Djarumen.wikipedia.org

  Djarum obtained a 30-year build-operate-transfer contract involving the redevelopment of Hotel Indonesia in Jakarta.

• 1997

  Investment in Bank Central Asia

  [1]Djarumen.wikipedia.org

  Djarum joined the consortium that bought Bank Central Asia after the Asian financial crisis.

• 1978

  Machine-rolled kretek production begins

  [1]Djarumen.wikipedia.org

  Djarum began machine-rolling kretek while retaining hand-rolled production.

• 1974

  PB Djarum is founded

  [1]Djarumen.wikipedia.org

  Budi Hartono founded the PB Djarum badminton club.

• 1963

  Factory fire and family succession

  [1]Djarumen.wikipedia.org

  A factory fire nearly destroyed the business around the time of Oei Wie Gwan's death. His sons Budi and Bambang Hartono took control and rebuilt the company.

• 1951

  Oei Wie Gwan acquires NV Murup

  [1]Djarumen.wikipedia.org

  Oei Wie Gwan acquired the nearly defunct Kudus cigarette company NV Murup and adopted the shortened Djarum name from its Djarum Gramofon brand.

A major Indonesian kretek manufacturer positioned around clove-cigarette heritage, broad brand segmentation, and mass-market domestic and international distribution; the wider group also presents itself through banking, consumer goods, technology, property, entertainment, and sports.

• Kretek cigarette

  Djarum Black

  A prominent Djarum cigarette line associated with dark visual branding and the company's clove-cigarette portfolio. It is one of the brand's best-known products in domestic and international markets.

• Kretek cigarette

  Djarum Super

  A major Djarum kretek brand and one of the company's most popular offerings. It represents the mainstream cigarette segment of the Djarum portfolio.

• Cigarette

  L.A. Lights

  A widely recognized Djarum cigarette brand included among the company's leading domestic and international products.

• Clove cigarette

  Hand-rolled kretek

  Djarum continues the Indonesian hand-rolling tradition alongside industrial production. These products are made through manual labor and remain part of the company's historical manufacturing identity.

• Clove cigarette · 1978

  Machine-rolled kretek

  Introduced in the late 1970s, machine-rolled kretek enabled Djarum to increase production volume while maintaining a broader portfolio of clove-cigarette products.

• 2016

  Child labor and hand-protection allegations

  Human Rights Watch implicated Djarum and other Indonesian tobacco companies in the use of child labor and reported inadequate hand protection in tobacco-related work.

  Source

• 2009

  Regulatory controversy over United States clove products

  United States restrictions on flavored cigarettes affected Djarum's clove products. The products were subsequently marketed as filtered cigars, a change that reflected regulatory treatment rather than a simple continuation of their former cigarette classification.

  Source

Read more

• 2008Djarum Indonesia Super League sponsorship

  Indonesia

  Djarum continued its football sponsorship after the league adopted the Indonesia Super League name.

  Outcome. The branded sponsorship continued through 2011.

  Source
• 2005Liga Djarum Indonesia sponsorship

  Indonesia

  Djarum served as the main sponsor of Indonesia's top football league, which carried Djarum branding from 2005 through 2007.

  Outcome. The sponsorship linked the Djarum name with national professional football.

  Source
• 1974PB Djarum badminton development

  Indonesia

  Through PB Djarum and the Djarum Foundation, the group supported badminton training and competition in Indonesia.

  Outcome. The club became associated with internationally successful Indonesian badminton players.

  Source
• Garuda Select support

  Indonesia

  Djarum has been associated with Garuda Select, a football talent-development and acceleration program.

  Source
• Djarum motorsport events

  Indonesia

  The group has supported events including Djarum Superchallenge Super Prix and the Djarum 76 Trial Game.

  Source

• 2009

  United States filtered-cigar positioningOther

  Background

  The Family Smoking Prevention and Tobacco Control Act restricted most flavored cigarettes in the United States, affecting clove products.

  Action taken

  Djarum's United States clove products were marketed as filtered cigars and packaged with black paper.

  Aftermath

  The change allowed the products to remain available in a different regulated category.

  Source

• 2004

  Hotel Indonesia and Grand Indonesia developmentStrategy

  Background

  Djarum was expanding from tobacco into property and commercial infrastructure.

  Action taken

  The company acquired a 30-year build-operate-transfer contract to develop and renovate Hotel Indonesia within the Grand Indonesia superblock.

  Aftermath

  The project became a prominent example of the group's property diversification in Jakarta.

  Source

• 1997

  Investment in Bank Central AsiaM&A

  Background

  Indonesia's banking sector was being reorganized after the Asian financial crisis.

  Action taken

  Djarum joined a consortium that acquired Bank Central Asia from the government restructuring agency.

  Aftermath

  BCA became a central asset of the diversified Djarum Group, with the group later controlling a majority stake.

  Source

• 1978

  Adoption of machine-rolled kretek productionGeneration change

  Background

  Djarum's historical production was centered on hand-rolled kretek, but growing scale required additional manufacturing capacity.

  Action taken

  The company introduced machine-rolled kretek while continuing to produce hand-rolled cigarettes.

  Aftermath

  The dual production model supported larger output without eliminating the company's traditional hand-rolling operations.

  Source

1. 1Djarumen.wikipedia.org