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)