Sampoerna profit up 35% to Rp 353 billion

Sampoerna profit up 35% to Rp 353 billion

JAKARTA (JP): PT Handjaya Mandala Sampoerna, a publicly listed
cigarette maker, reported a 35-percent increase in its after-tax
profit to Rp 353 billion (US$152.6 million) last year.

The company's president, Putera Sampoerna, told reporters
after an annual meeting with investors yesterday that the profit
was generated by a 23-percent increase in total sales, which were
supported by a 16-percent increase in the retail prices of clove-
blended cigarettes(kretek) in nine major cities in the country.

The firm's net sales reached Rp 1.66 trillion last year as
compared to Rp 1.35 trillion in 1994.

The sales of the company's flagship brand, Dji Sam Soe, rose
from 8.8 billion cigarettes in 1994 to more than ten billion last
year.

Sales of the company's low tar and low nicotine A-Mild brands
also rose over 118 percent.

Putera said that the company's marketing efforts over the last
few years have established an image for A-Mild, which will
further strengthen the company's position in the cigarette
market.

"Moreover, A-Mild is the sole low tar kretek product in
Indonesia. A survey conducted by Survey Research Indonesia showed
that the image of A-Mild is now on par with the foreign brand
Marlboro," he added.

A director of the company, Eka D. Kasih, forecast that the
company's net sales would reach Rp 2.4 trillion this year and Rp
2.7 trillion next year.

"We expect to book Rp 440 billion in net profit this year and
about Rp 590 billion next year," said Eka.

Putera explained that the company will continue to expand its
production and marketing activities in the Philippines, Myanmar,
Vietnam and Malaysia with a total investment of S$63 million
(US$44.6 million).

"The share of kretek products has reached 20 percent of the
total cigarette market in Malaysia. But Gudang Garam (produced by
Sampoerna's main competitor PT Gudang Garam) still controls about
90 percent of the kretek market," Putera said.

However, he added, his company has promising growth prospects
there, particularly because the Malaysian government has limited
the tar content of kretek cigarettes to be sold in that country
to a maximum of 20 mg. (08)