Sampoerna 2004 sales rise 15% on higher A-Mild demand

Sampoerna 2004 sales rise 15% on higher A-Mild demand

PT H.M. Sampoerna, Indonesia's second- largest cigarette maker,
said sales last year rose 15 percent, aided by higher prices and
demand for its A Mild brand.

Sales rose to Rp 16.78 trillion (US$1.8 billion) from Rp 14.53
trillion in 2003, the Surabaya, East Java-based company said in a
statement.

Sampoerna sold 41.38 billion cigarettes last year, 13 percent
more than the 36.48 billion in 2003.

A Mild sales rose a quarter to 16.68 billion cigarettes, while
sales of main brand Dji Sam Soe rose 4 percent to 16.81 billion
cigarettes.

"Sampoerna is the only cigarette maker that continues to show
growth, thanks to its strong A Mild and Dji Sam Soe brands that
are well accepted in both urban and rural areas," said Arfan
Karniody, who holds Sampoerna shares among the $328 million worth
of Indonesian assets he helps manage at Niaga Asset Management in
Jakarta.

"Others haven't been able to keep up with Sampoerna in terms
of growth."

Indonesian cigarette companies have benefited from a
recovering economy and the absence of tax increases last year.
The economy probably grew 4.8 percent last year, according to the
central bank's estimate.

The government has also said it won't raise excise taxes on
cigarettes this year.

"We managed to move our aggregate distribution prices upward
by 1 to 2 percent" last year, the statement said. Distribution
price is the rate Sampoerna charges distributors.

"In the absence of excise increases, these price increases
should translate into margin improvements in 2005."

About 90 percent of Indonesian smokers prefer "kretek"
cigarettes that contain a mixture of tobacco and sweet-smelling
clove spice.

Sampoerna, PT Gudang Garam, the nation's biggest, and PT
Djarum, the third-biggest maker, control more than 80 percent of
the local market of approximately 141 million smokers, industry
Gappri association said earlier. -- Bloomberg