Indonesia Gudang Garam Aug Cigarette Sales 7.2 Bln Sticks (fwd)

[Robert Weissman <rob@essential.org>]

Indonesia Gudang Garam Aug Cigarette Sales 7.2 Bln Sticks
by Dow Jones Newswires
Source: The Wall Street Journal Interactive Edition, Wednesday, 9/29/99

JAKARTA -- Indonesia's total cigarette sales rose 19% in August to 18.47
billion sticks from 15.50 billion sticks in July, with the nation's
largest clove cigarette maker PT Gudang Garam (P.GGR) maintaining its top
position in the domestic market, the association of Indonesian cigarette
producers, GAPPRI, said Wednesday.

Gudang Garam's total cigarette sales, including sales of hand- and
machine-rolled cigarettes, rose 72% in August to 7.2 billion sticks, from
4.2 billion sticks in July, according to GAPPRI data obtained by Dow Jones
Newswires.

This boosted Gudang Garam's market share to 39% in August from 27% a month
earlier, the data said.

The industry sold a total 126.95 billion sticks of cigarettes for the
first eight months of the year, up only 1% from 126.27 billion sticks a
year earlier.

Another listed cigarette company, PT HM Sampoerna (P.HMS), came in second
with 15% market share. This, however, was lower than its 18% share in
July.

Sampoerna's cigarette sales volume dropped 2% in August to 2.67 billion
sticks from 2.73 billion sticks in July, GAPPRI said.

In third position was PT Djarum Kudus, with a market share of 14%, down
from 18% a month earlier. Djarum sold 2.51 billion sticks of cigarette in
August, up 21% from 2.09 billion sticks in July.

A cigarette analyst with a local securities company said the strong rise
in Gudang Garam's sales reflected an improvement in smokers' purchasing
power.

"With the continued decline in prices of basic food commodities, people
had more cash to switch back to Gudang Garam's cigarettes from cheaper
ones," the analyst said.

She added that an increase in tobacco and clove prices gives Gudang Garam
and other large producers an advantage over smaller producers because the
larger companies have the financial strength to build raw material
inventory for several years.

"This caused outputs of small companies to decline, allowing the big guys
such as Gudang Garam (to capture the lost market share)," she said.

Shares of Gudang Garam fell 125 rupiah ($1=IDR8,425) to close at IDR16,075
Wednesday. HM Sampoerna shares ended up IDR75 at IDR13,975.

-By I Made Sentana (62-21) 3983 1277;imsentana@ap.org

URL for this Article:
http://interactive.wsj.com/archive/retrieve.cgi?id=DI-CO-19990929-001719.djml