Indonesia - Industry minister to close tobacco to new foreign investment..

July 5, 2009 - Indonesian Industry Minister Fahmi Idris said Thursday that he will propose closing the cigarette industry for new foreign direct investment in order to protect existing producers.

Idris added that his ministry will also propose six other industries, such as sugar refinery and pulp-making, to be closed for foreign investors.

Such a proposal will be subject to approval by the president.

There are now around 8,000 local cigarette producers, Idris said, and they are mostly small companies.

Such a proposal will be subject to approval by the president.

There are now around 8,000 local cigarette producers, Idris said, and they are mostly small companies.

Phillip Morris International and British American Tobacco Plc (BAT.LN) are the biggest foreign investors in the industry and have majority stakes in two large local producers.

Philip Morris International (PMI) back in March of 2005 purchased an Indonesian company PT HM Sampoerna.Phillip Morris acquired a 98% stake in PT HM Sampeorna (HMSP.JK) for $4.8 billion in 2005, and BAT last month bought an 85% stake in PT Bentoel International Investama (RMBA.JK) for $494 million.

Reference: Indonesian Min: To Propose Closing Cigarette Indus For New FDI (Foreign Direct Investment) by Jakarta Bureau; Dow Jones Newswires, Wall Street Journal, 7/2/2009.

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