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Jakarta Post

Cigarette makers defy crisis, grows stronger

Local tobacco companies remain immune to the global economic downturn as indicated by first quarter cigarette sales which jumped by 11

(The Jakarta Post)
Jakarta
Thu, May 28, 2009

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Cigarette makers defy crisis, grows stronger

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ocal tobacco companies remain immune to the global economic downturn as indicated by first quarter cigarette sales which jumped by 11.5 percent as against the same period last year.

According to data released by publicly listed PT HM Sampoerna, the nation's biggest cigarette maker by volume, cigarette sales totalled 59.6 billion sticks between January and March this year as against 53.5 billion sticks recorded in the same period last year.

Around 59.7 percent of the first quarter sales comprised machine-rolled clove cigarettes, 32.2 percent hand-rolled clove cigarettes and 8 percent machine-rolled non-clove cigarettes. While booking a 2.5 percent rise in sales volume to 18.1 billion sticks from 17.7 billion, the market share of Sampoerna-branded cigarettes dropped to 24.3 percent from 25 percent.

The consolidated market share of the Sampoerna brand and the Philip Morris brand was also very slightly down to 29 percent from 29.5 percent. But the Philip Morris market share rose to 4.7 percent from 4.5 percent. Sampoerna is controlled by US-based cigarette giant Philip Morris, which includes the world famous Marlboro brand.

Sampoerna did not explain the reasons behind the slight decline in the market share of its Sampoerna-brand nor the rise in its overall cigarette sales.

The company's president director, Kevin Douglas Click, only said he was upbeat sales would remain stronger this year. Indonesia is a haven for smokers as Vice President Jusuf Kalla once said that the country had the cheapest cigarette prices in the world due to its low excise taxes.

Aside from Sampoerna and Philip Morris, the country also houses five other renowned giant tobacco companies; PT Gudang Garam, PT Djarum, PT Nojorono, PT Bentoel, and PT British American Tobacco (BAT) Indonesia.

Sampoerna's rival publicly listed BAT, which sells international brands including Lucky Strike, Pall Mall, Dunhill, Ardath, Kansas and Commfil, announced Wednesday that sales volume was still growing even though Indonesia was still facing negative effects from the economic downturn.

The company, however, suffered a decline in its market share during the first quarter of the year to 2 percent down from 2.5 percent compared to the same period last year.

BAT refused to explain any details on the drop in its market share, and sales volume.

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