BAT cuts cigarette output

JAKARTA (JP): The publicly listed cigarette producer PT BAT Indonesia Tbk has suffered a substantial drop in sales due to the introduction of a new excise tax in April.

The company's corporate secretary, Didi Nugrahadi, said on Friday that the sales of the company's cigarette brands, especially those directed to the low and middle market segment, had dropped sharply due to the higher excise tax.

He said the company's decline in sales had caused a drop in its market share to 7.2 percent from 10.9 percent early this year.

The drastic drop in sales has forced the company to reduce production capacity by 35 percent to 900 million cigarettes per month in July from 1.6 billion cigarettes, Bisnis Indonesia reported.

Didi estimated that this year's total sales would stagnate at last year's level of Rp 1.01 trillion. "During the first semester, sales only reached about Rp 505 billion and no significant increase was expected in the second half," he added.

BAT manufactures and sells several popular brands such as Lucky Strike, Kent, Ardath and Commodore.(02)