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