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tobaccoasia 35 Boegli.ch STORY TELL YOUR BRAND Boegli–Gravures can help you to develop subtle, refined and ingenious ways of elevating your brand's characteristics and enhance your consumer brand experience. Let us partner with you to bring new dimensions to your marketing. Sans titre-1 6 12.05.2015 12:04:10 nesia-listed companies to have at least 7.5% of its shares publicly held. Even this relatively small re- linquishing of shares will raise upwards of US$1 billion, making the sale, if realized, one of the larg- est share sales in Southeast Asia in 2015. Sampo- erna reportedly plans to sell as many as 269.7 mil- lion shares to raise the required amount of public holdings from 1.82% to 7.5% in order to comply with the new rule. In the first quarter of 2014, Sampoerna posted 5% revenue growth to IDR18.3 trillion (almost US$945.7 million) from the same period in 2013. In Q1 2015, the company posted a 5.9% growth and 35.4% market share, largely due to strong per- formances by its SKM brands, Sampoerna A, Dji Sam Soe Magnum, and Magnum Blue. The company has also recently introduced U-Bold, a full-flavored, machine-made kretek. Sampoerna's SKT produc- tion, however, showed a 16.1% drop in 2014. Gudang Garam, another major producer of kretek cigarettes and whose products are 90% SKMs, enjoys a 23% share of the domestic mar- ket. Credit Suisse expects Gudang Garam to have 5% volume growth this year. However, in the first quarter of 2014 the company reported IDR1.4 tril- lion in net profit, while in Q1 2015 that figure has gone down by 7.1% to IDR1.3 trillion. Economic Downturn and Higher Taxes Since January 2015, Indonesian tobacco products faced an average tax rise of 8.7%. Machine-rolled cigarettes are now priced at IDR355 per stick while hand-rolled cigarettes are IDR290 per stick. This increase was in line with the government's target to increase state revenue from IDR111 trillion in 2014 to IDR120.5 trillion in 2015, a 9.1% increase. The increased prices have already brought about declines in sales as consumption is down amid In- donesia's worst economic slowdown since 2009. Industry insiders have also expressed concern that the tax hike and sales drop will effect produc- tion and lead to heavy job losses. From 2007 to 2013, cigarette production in Indonesia increased at an annual 7% average. Last year, it declined 0.5% and this year will see a 2% fall, says GAPPRI (the Association of Indonesian Cigarette Producers). Heru Pambudi, the Finance Ministry's director general of customs and excise, said, ""If [production] is declining and we are not careful on imposing the tax, production will de- cline further." The number of cigarette factories dropped from more than 3,000 factories 5 years ago to 600 now.