SNTR plans to lure rich clients

Societatea Nationala Tutunul Romanesc (National Romanian Tobacco Company-SNTR) is preparing to release its first middle-end product on the market, in an attempt to compete with the leading international producers.

“The new cigarette brand will cost some 15-20,000 lei,” Nicolae Istudor, SNTR general manager, told Ziarul Financiar.

The low and moderate price cigarette segment accounts for most of the Romanian market right now, due to high excises and low purchasing power.

“I do not know whether the new product will come out this year. We are currently working on a policy to promote it together with Global Media, the winner of the pitch,” Istudor said. The budget allotted to promote the product will reach some $100,000, according to Istudor.

He mentioned SNTR was in talks with a foreign company to release two new brands under a partnership, but did not volunteer the name of that company, arguing,” we have to keep these negotiations secret, as the multinationals on the market at the moment could block them.”

The only foreign company to have publicly announced plans to start producing locally is Altadis, the French maker of Gauloises Blondes cigarettes.

SNTR also plans to considerably shrink its product supply as of 2002, which now includes more than 30 brands. The company will focus on the best-selling products: Snagov, Carpati and Coloana, Istudor says.

“The improvement in the offer cannot but benefit the consumer. As a producer, we are ready to withstand the competition and retain our consumers. We hope these actions will help SNTR improve its financial situation and be able to pay its debts to the state budget. In any case, SNTR can rest assured of our fair-play,” Adrian Popa, Corporate Affairs Director with British American Tobacco (BAT), maintained.

The Romanian cigarette market amounted to 8,800bn (some $409 million) lei in 2000, with BAT accounting for 32.4%, JT International – 25.8%, Philip Morris – 18.7%, while SNTR accounted for 17.4%, according to data provided by ACNielsen, a market research company.

The survey covered the retail market and the over-market. SNTR in 2001 estimates some 4,625bn lei ($150 million) in turnover, less than in 2000 when it registered sales estimated at $178 million.

The company at the end of 2000 had 2,370bn lei in debts to the state budget, which it pays in instalments.