Indonesia plans to cap cigarette output by 2010

JAKARTA, June 19 (Reuters) Indonesia plans to start limiting cigarette production by 2010 in a tentative move to curb smoking in the world's fifth-largest tobacco market.

While the number of smokers in western countries has fallen, a third of Indonesians now smoke, up from a quarter 10 years ago.

Cigarettes cost as little as 1 dollars a pack in Indonesia, which has a population of around 225 million.

Imam Haryono, director of beverages and tobacco at the Industry Ministry, today said there were plans to cap production at 240 billion cigarettes in 2010.

''In 2010, we will impose a maximum production of 240 billion sticks and in 2015 the limit will be 260 billion and remain at that until 2020,'' Haryono said.

Indonesians smoked an estimated 220 billion cigarettes last year, the same as in 2005 but below a peak of 239 billion in 2000, according to government data.

According to the World Health Organisation, about a quarter of deaths in Indonesia in 2005 were caused by tobacco, and 80 percent of lung and respiratory cancer cases were due to smoking.

The industry expects to pay 42 trillion rupiah (4.8 billion dollars) in cigarette excise this year, up from 11 trillion rupiah in 2001.

Cigarette makers such as Gudang Garam and Handaya Mandala Sampoerna are among the biggest firms on the stock exchange. The four locally listed tobacco companies have a combined market capitalisation of more than 9 billion dollars.

Some lawmakers have been trying to introduce an anti-tobacco bill seeking to ban advertising by tobacco firms, increase taxes on cigarettes and make graphic warnings on cigarette packs mandatory, but opponents argue this will harm millions who depend on the tobacco industry for a living.

Indonesia is also reluctant to sign the Framework Convention on Tobacco Control (FCTC) aimed at cutting cigarette consumption because of concerns about the developing country's economy.

China, the world's largest cigarette producer, is among countries that have signed the treaty.

REUTERS RJ RK1335