Jakarta. Gudang Garam (GGRM), one of Indonesia's oldest and most successful cigarette companies, is diversifying its business portfolio by entering the construction sector and planning to construct a toll road project in East Java.

The company said in a public filing on Tuesday that it recently established a subsidiary, Surya Sapta Agung Tol, to construct a toll road connecting Kediri and Tulungagung, with an initial capital of Rp 3.5 trillion ($223.6 million).

Gudang Garam holds a 99.9 percent stake in Surya Sapta, with Suryaduta Investama owning the remaining 0.1 percent. Suryaduta is a majority shareholder in Gudang Garam, controlling a 69.29 percent stake in the cigarette company.

Both Gudang Garam and Surya Sapta are based in Kediri, approximately 150 kilometers west of the provincial capital, Surabaya.

"Surya Sapta’s primary businesses include toll road operatorship, civil engineering in road construction, and their supporting infrastructures,” Gudang Garam director Heru Budiman said in a statement.

The construction of the 44.5-kilometer toll road is estimated to cost Rp 10.26 trillion.

This marks the second infrastructure project initiated by Gudang Garam, following the recent completion of a small airport in Kediri. Although Dhoho Kediri Airport opened to the public earlier this month, it is not yet fully operational.

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