Philip Morris hopes to smoke competition

JAKARTA (JP): Cigarette maker PT Philip Morris Indonesia entered the country's most lucrative but competitive market segment with the launch of its cheaper brand on Tuesday.

Longbeach will be available to the market next week with a price of Rp 2,500 (31 US cents) for one 20-cigarette pack.

Longbeach will be in tight competition with low-end regular cigarettes Ardath, Commodore and Kansas, which are also at the same price level.

The new brand will go head-to-head with clove-blended (kretek) brands Gudang Garam, Djarum and Sampoerna which sell at Rp 2,500 to Rp 3,000 per pack.

Company branch manager Ian D Billingham said they expected Philip Morris' image as a producer of high-end cigarette brands including Marlboro would help the marketing of the new brand. He refused, however, to reveal the sales target for it.

Longbeach, manufactured at the company's cigarette factory in Malang, East Java, will enter the market on May 10.

Philip Morris Indonesia, a subsidiary of the U.S.-based giant tobacco company Philip Morris Companies Inc., claimed Longbeach was the result of a two-year survey it conducted in order to produce a cigarette with an international quality but an affordable price for most Indonesian smokers amid the economic crisis.

Unlike its high-end brand Marlboro, which consists mostly of imported raw materials, Longbeach is made from domestic supplies, allowing it to be a comparatively cheaper price. Marlboro currently sells at Rp 6,000 per pack.

The company said it bought the tobacco for Longbeach from Lombok, Bali and Lumajang, East Java.

Billingham said of the 222 billion cigarettes sold on the domestic market last year, 85 percent were clove cigarettes and 15 percent were imported and local regulars.

Locally made cigarettes Ardath, Commodore and Kansas control 94 percent of the domestic market for regular cigarettes and Marlboro holds 6 percent of the imported market. (jsk)