Gudang Garam's net profit declines to Rp 2 trillion
The Jakarta Post, Surabaya
The country's largest cigarette maker company PT Gudang Garam announced a decrease in net profit to Rp 2 trillion for 2001 from Rp 2.24 trillion in the previous year due to a higher production cost and debt interest payments.
However, sales rose 20 percent to Rp 17.9 trillion.
The rise in sales revenue was due to the increase in the retail price following the government's raising of the excise tax three times that year, company director Heru Budiono told reporters Saturday following the shareholders' meeting.
Based in Kediri, Central Java, Gudang Garam, which only produces clove cigarettes, sold 13.6 billion sticks of hand- rolled cigarettes and 56.22 billion sticks of machine-rolled cigarettes.
The company produces 183 million sticks of cigarette per day and has a production capacity of 105 billion sticks per year.
Heru said the shareholders agreed to distribute Rp 577.2 billion of the net profit or Rp 300 per share in dividend and retain the balance to finance the company's expansion plan.
The retained profit would also be used to take over PT Karya Dibya Mahardika, a small cigarette producer, which manufactures low-tar and nicotine clove cigarettes.
"The company (Karya Dibya) would be used by Gudang Garam to plunge into low-tar mild type cigarette business," said Heru.
Gudang Garang will launch its low-tar cigarettes in August, Heru said, adding he was optimistic about the prospect of mild cigarettes.
Currently, mild cigarettes account for about 10 percent of the total of clove blended cigarette output in Indonesia.
Gudang Garam, which in the past rarely faced labor disputes, was reportedly forced to stop operations for several days recently due to a strike by its workers, who demanded better salaries.
Heru said the strike had not caused a significant impact on the company's operation.
The strike was launched by a small number of workers who protested the company's program of improving the discipline of the workers, he said.