Philip Morris eyes 20% increase in sales

Philip Morris eyes 20% increase in sales

JAKARTA (JP): The local subsidiary of New York-based Philip
Morris expects a 20 percent increase in its cigarette sales to
about five billion sticks this year from 4.2 billion the previous
year, a senior executive said here on Tuesday.

PT Philip Morris Indonesia corporate secretary Geroad Yusuf
said the target was based on the belief that domestic demand for
nonclove cigarettes would continue to grow this year.

He said the strong growth in the domestic demand for nonclove
cigarettes was indicated by the company's cigarette sales last
year, which were a 220 percent increase over the 1.9 billion
sticks sold in 1999.

"We're optimistic we will meet our target," he said after the
launch of the company's new cigarette brand L&M.

David Tjokro, the company's sales and marketing manager, said
with L&M, which has long been available outside the country,
Philip Morris was seeking to take advantage of the growth in the
domestic market.

"We aim to sell about 1.2 billion sticks of L&M, or 0.5
percent of the total cigarette market in the country this year,"
he said, adding that L&M would compete with other brands that
were sold for between Rp 3,500 and Rp 4,000.

Aside from L&M, Philip Morris also produces Marlboro and Long
Beach, which respectively accounted for about 90 percent and 10
percent of the company's sales last year.

The company operates a cigarette factory in Malang, East
Java.

When asked to comment on the government's plan to raise the
retail price of cigarettes by an average 30 percent in July,
Geroad said the company welcomed the move because it would enable
it maintain its profits despite the weakening rupiah.

The rupiah's fall over the past several months has resulted in
a rise in the company's operating costs, he said, saying 80
percent of its raw materials such as tobacco were imported. (05)