BAT cuts cigarette output

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)