Indonesia - kretek cigarette maker Gudang Garam's 2009 net profit jumps 84 percent...


March 31, 2010 - Gudang Garam reported 2009 net profit jumped 84 percent to 3.46 trillion rupiah ($380.8 million), from 1.88 trillion rupiah in 2008 ($1 = 9,085 rupiah). Gudang Garam (Indonesian for "salt warehouse") is a major Indonesian kretek (clove cigarette) manufacturer. It was founded on 26 June 1958 by Tjoa Ing Hwie, who changed his name to Surya Wonowidjojo. In 1984, control of the company was passed to Wonowidjojo's son, Rachman Halim, who subsequently became the richest man in Indonesia. Halim headed the company until his death in 2008.

The market for tobacco in Indonesia increased at a compound annual growth rate of 6.2% between 2003 and 2008. The cigarette industry has faced dropping revenues in many counties BUT NOT INDONESIA due to numerous strict anti-smoking policies, constantly growing prices and public health concerns. PT HM Sampoerna, which has a 29 percent market share, dethroned Gudang Garam to become Indonesia’s largest cigarette-maker in 2006, a year after Philip Morris acquired the company. Gudang Garam controls 26.5 percent of the market, down from 36 percent in 1999. Tobacco in Indonesia to 2013, Datamonitor, 8/2009.

In countries including Indonesia, Bangladesh, Mexico and Egypt, very poor households spend up to 15% of their incomes on tobacco products, according to the World Health Organization (WHO). That exacerbates social and health inequalities and can push families even deeper into poverty, because they are more likely to develop smoking-related illnesses and die than wealthier compatriots. About 1.2 million of the five million tobacco-related deaths annually are in south-east Asia, where almost half the world's poor live. Some of them spend more on tobacco than on food, shelter, healthcare and education. (Developing world faces black market cigarette plague, Denis Campbell, health correspondent, 6/28/2009)

Reference: TABLE-Indonesia Gudang Garam's 2009 net profit jumps 84 pct, reporting by Telly Nathalia; editing by Sara Webb. 3/30/2010.

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