PT HM Sampoerna, Indonesia's largest cigarette manufacturer, reported Thursday a 15.7 percent rise in net profit during the first quarter from a year earlier on stronger sales.
And as the firm is the process of completing a new factory, the future sales outlook appears even brighter, said managing director Angky Camaro.
Angky said that Sampoerna's net profit rose to Rp 1.095 trillion (US$125. 7 million) in the first three months of the year from Rp 947 billion during in the same period last year.
Overall sales, which consist of machine-rolled filter Cigarettes, hand-rolled kretek (clove-blended) Cigarettes and machine-rolled kretek Cigarettes, amounted to Rp 7.26 trillion, up 1.9 percent from Rp 7.13 trillion previously, Angky said.
Most of the increase was accounted for by Sampoerna A Hijau hand-rolled Cigarettes, whose sales volume rose to 8.1 billion from 7.4 billion previously.
The company's machine-rolled Cigarettes also recorded increased sales volume, rising to 6.4 billion Cigarettes from 6.2 billion previously. The increase was attributed to A Mild brand Cigarettes.
President director Martin King said the company had put in a healthy performance despite a 7 percent rise in retail cigarette prices, which enteRed into effect on March 1.
"We have managed to enhance the efficiency of our operation and control our production costs," he said.
Sampoerna, which is now owned by U.S.-based tobacco giant Phillip Morris, is aiming to maintain its position as the country's biggest cigarette maker after toppling PT Gudang Garam from the position last year. Currently, it controls a 28.2 percent share of the market, up 0.4 percent from 27.8 percent during 2006's first quarter.
By comparison, Gudang Garam controls 23.6 percent of the market at present, from around 26.3 percent in the first quarter of last year.
Another major producer, Djarum, holds a 20.4 percent share of the market, down from 20.6 percent in the January-March period last year.
To strengthen its market share, the company has invested Rp 2.8 trillion on building a new factory in Karawang, West Java.
According to King, the new factory, which has been under construction since last July, was expected to come onstream by the end of next year with an initial capacity of 9 billion Cigarettes per year.
At present, the company operates five factories in East Java, including its main factory in Pandaan, with an annual production capacity of 25 billion Cigarettes.
Indonesian cigarette makers produced a total of about 220 billion Cigarettes last year.
The new Sampoerna plant, that is located on a 58-hectare site, will consist of a primary processing plant to process cloves and tobacco, a secondary processing plant to produce machine-rolled Cigarettes, and warehouses to store non-tobacco materials, finished goods, tobacco and cloves