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Sampoerna projects 2 percent decline in cigarette sales this year
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A worker packages cigarettes at a factory in Surabaya, East Java, recently. (thejakartapost.com/Wahyoe Boediwardhana)
C
igarette producer Hanjaya Mandala Sampoerna has projected a 2 percent year-on-year (yoy) decline in its cigarettes sales volume this year, especially for kretek (clove cigarettes), due to the excise price hike.
The share of hand-rolled kretek in Sampoerna’s total products in the third quarter of 2016 has dropped to 6.6 percent from 7.4 percent in the same period last year, as more smokers have shifted from hand-rolled to machine-made cigarettes, which have lower nicotine content.
However, despite the soft performance in the hand-rolled kretek segment, the company will not cease production of the labor intensive product, Sampoerna president director Paul Janelle said a press statement in Jakarta on Monday.
"Sampoerna is committed to the hand-rolled kretek segment and we are taking action to stabilize the decline, including through innovations to enhance our hand-rolled kretek products by offering our products at competitive prices and investing in the brand through marketing and sales support," he said.
Last year the company sold 313.8 billion cigarettes, a slight increase of 0.22 percent compared to that in 2014. It saw a 4.9 percent increase in net revenue (excluding excise taxes) to Rp 31.8 trillion.
However, as of the third quarter, it held 34.5 percent of the market share in the cigarette industry, compared to 34.1 percent in the same period last year. Its white cigarettes lead the industry with 79 percent market share. (ags)
