Sampoerna cigarette sales up 14% amid stable prices

The Jakarta Post, Jakarta

Publicly listed PT H.M. Sampoerna, the country's third-largest cigarette producer in terms of market share, said that its first half cigarette sales rose by 14.2 percent, primarily due to rising consumer spending amid a stable pricing environment.

The Surabaya-based company said in a statement on Monday that its cigarette sales rose to 20.2 billion cigarettes in the first semester of this year, from 17.6 billion in the same period of last year.

In terms of value, sales surged by 17 percent to Rp 8.15 trillion (US$914 million) from Rp 6.99 trillion. The sales were mostly on the domestic market.

"As street prices stabilized, cigarette consumption continued to benefit from rising purchasing power," said Sampoerna in a statement.

Sampoerna said that sales of its main brand, the hand-rolled Dji Sam Soe, increased by 8.1 percent to 8.37 billion cigarettes in the first half -- ending June this year -- from 7.75 billion a year ago. The brand accounted for more than 50 percent of Sampoerna's total sales revenue in the first half with Rp 3.54 trillion.

The company said that the launch of "Dji Sam Soe super premium" had surpassed expectations and helped reinforce the premium positioning and pricing of the brand.

Elsewhere, sales of the company's second main brand, the low- tar and low-nicotine rolled cigarette A Mild, jumped by 24.2 percent to 7.98 billion cigarettes from 6.43 billion cigarettes. With a sales value of Rp 2.3 trillion, A Mild contributed around 30 percent of Sampoerna's total first-half revenue.

"A Mild continued to lead our stable of premium brands with market share increasing to 7 percent as of June, from 6.6 percent at the end of 2003," Sampoerna said.

Sampoerna shares on the Jakarta Stock Exchange, which are included on the blue-chip list, ended higher on Monday's trading by Rp 300 to Rp 5,050.

According to AC Nielsen's first quarter report on the country's cigarette industry, Kediri-based PT Gudang Garam is still the country's largest cigarette producer with a 29.9 percent market share, followed by PT Djarum with 21.5 percent, Sampoerna with 19.2 percent, PT Philip Morris Indonesia with 4.5 percent, PT Bentoel with 3.2 percent and PT British-American Tobacco Indonesia with 2.6 percent.