Marlboro maker sets sights on Asia

Marlboro maker sets sights on Asia

Marlboro maker Philip Morris said on Monday in Washington that
its bid for a major Indonesian tobacco firm would give it vital
local knowledge to expand in Asia -- including into the world's
biggest cigarette market China.

The Altria Group, whose operating arm is Philip Morris
International, said the US$5.2 billion it has offered to buy
Sampoerna would earn it handsome rewards, both financially and in
product share in heavy-smoking Indonesia.

"Our ambition is that together we become the market leader in
Indonesia -- as well as growing Marlboro," Altria chief executive
Louis Camilleri told reporters in a conference call.

"To participate fully in the Indonesian market you have to
offer what the consumer wants," he said.

For Philip Morris, that means the ability to tap into
Sampoerna's expertise in the production of clove or "kretek"
cigarettes, which Camilleri said account for 92 percent of
cigarettes sold in Indonesia.

"We believe that there are opportunities for kretek elsewhere
than Indonesia," he said, noting that the country is a major
tobacco exporter to China.

"We believe we can increase the consumption of kretek
elsewhere."

In Indonesia, where 70 percent of men smoke and anti-tobacco
laws are light, Camilleri said the Sampoerna investment would
earn Philip Morris a "double-digit rate of return".

Asked about the health risks attached to the strong clove
cigarettes, the Altria boss said: "We assured ourselves that they
are not more or less dangerous than conventional cigarettes." --
AFP