Indonesia's Tobacco Firms Seen Boosting Profits

Source from:  Most Popular - Business Reuters - Tuesday, October 30 10/30/2007

Indonesian tobacco firms bought 13 percent more excise stamps in the first nine months of 2007, industry data showed on Monday, suggesting full-year output in the world's fifth-largest tobacco market may beat forecasts. The higher excise stamp purchases -- used for production usually within two to three months after the purchase -- are seen by analysts as an indication of stronger profits for local cigarette makers. Industry data showed Indonesian companies bought excise stamps worth 30.9 trillion rupiah in the first nine months of the year, up 13.1 percent from the year-ago period. The government expects cigarette output in Indonesia to rise 3 percent to 224 billion sticks this year. The country's top three cigarette producers -- PT Gudang Garam Tbk , PT Handaya Mandala Sampoerna Tbk , and privately-held PT Djarum -- accounted for 76 percent of the industry's stamp purchases in the January-September period. The government has said it aims to raise 42 trillion rupiah from excise tax this year, the bulk of which will come from cigarettes. Indonesia's $10 billion tobacco industry provides jobs for 7 million people and contributes about 10 percent to the state budget. While smoking has generally fallen in more developed markets over health worries in recent years, it has increased in Indonesia. Experts say more than a third of the population smokes today compared to a little over 25 percent about a decade ago. Enditem