Mr. Edward Frankel

Edward FrankelFormerly the Group Chief Operating Officer and a Director for PT. HMS, Mr. Frankel has worked over 25 years for Sampoerna Group companies.He received a B.A. from the University of California at Berkeley and a Masters in Administration from the University of Portland.

Any changes are also likely to come slowly, says Edward Frankel, a director at Sampoerna.And that, he says, is unlikely to threaten what remains a promising market for cigarette makers with a "very strong demographic pyramid".

"There's more young people entering the market every year, smoking is quite accepted here, and per capita consumption is quite low as a function of disposable income," says Frankel.

Angky Camaro, 55, Edward Frankel, 60, and Sugiarta Gandasaputra, 61, continue as Directors of PT HM Sampoerna.
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Edward Frankel Director, PT HM Sampoerna Tbk.

Prior to joining HM Sampoerna, Mr. Frankel had 26 years of management experience in both public and private organizations in the United States.

He joined HM Sampoerna in 1982 and held the positions of Director of Marketing and Chief Operating Officer.He was appointed to the HM Sampoerna Board of Directors in 2000.

Mr. Frankel received a bachelor's degree from the University of California at Berkeley and an MBA from the University of Portland.Sugiarta Gandasaputra Director, PT HM Sampoerna Tbk.

Edward Frankel
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Edward FrankelHe is one of the foundation's most brilliant advisors and he is keen in providing the foundation with new perspectives and from time to time, challenges the foundation to set the bar higher.Formerly the Group Chief Operating Officer and Director for PT HM Sampoerna, he has strong academic background in Education.

The meeting appointed Martin King, formerly managing director for Philip Morris' China unit, to lead the company and retains Angky Camaro, Edward Frankel and Sugiarta Gandasaputra as directors, as well as two commissioners.
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Director: Edward Frankel

Ed Frankel, Sampoerna's marketing director, says, Even at the height of the crisis, we do not pull back like other companies.We continued to aggressively support our brands. The majority of Sampoerna's growth comes from the continuing success of its flagship brand Dji Sam Soe, a nonfilter kretek.Sales of Dji Sam Soe in the first half of 1999 increased a stunning 141 percent over the comparable period in 1998.

Several factors can help explain the brand's spectacular growth.Indonesians universally regard Dji Sam Soe as the best cigarette.Frankel, however, can not attribute all of the brand's success to his marketing skills.After all, the brand had been sold in Indonesia decades before he was born.Citing extensive market research, Frankel claims, Every smoker smokes a Dji Sam Soe at least once a month.It is what you could call a secondary smoke.Someone may be an A-Mild smoker or even a Marlboro or value-brand smoker, but after dinner they will smoke a Dji Sam Soe.Or when going out they will buy a pack of Dji Sam Soe for status.Friends will often pool money to buy a pack. Quality, according to Frankel, is the key to the brand's success.Sampoerna uses only choice tobacco and cloves in the blend.

Sampoerna currently commands 14.1 percent of the total Indonesian cigarette market.It has 25 percent of the total urban market and almost 30 percent of the Jakarta market.Taking advantage of Indonesia's current nonrestrictive advertising environment, advertisements for A-Mild, the company's light kretek, and Dji Sam Soe blanket Jakarta.Due to a new government decree (see Playing Rules, page 50), however, the Indonesian tobacco industry may face more advertising restrictions.
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Frankel is most excited about the prospect of the Indian market.Sampoerna is in the process of negotiating a joint venture in the subcontinent.Perhaps owing to the popularity of bidis or the use of strong spices in their cooking, there has been an excellent response in India.It is very promising..

THE LEADERS AND BENTOEL.King of the Indonesian kretek manufacturers, PT Gudang Garam has been losing market share, but remains the largest company.
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Ed Frankel, marketing director at Sampoerna, says there has been a bit of smuggling of Sampoerna products into Malaysia, but nothing serious.He does point out an unusual quirk of the Indonesian market-cheap knockoffs.These be not counterfeit cigarettes, but their packaging strongly resembles popular brands.For instance, the Dji Sam Soe pack features the numbers 2-3-4 arranged in a semicircle.Imitators use the same color and design, but with different numbers.These imitations are made in Indonesia's small regional kretek factories.

We call them Dji Sam Soe Night Time.
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Frankel finds the rip-off brands more amusing than a serious threat, noting that they do not eat into Dji Sam Soe sales.

While no one would ever call it a knockoff, British American Tobacco Indonesia's Ardath Lights have a very similar package to Marlboro Lights.Like Marlboro Lights, Ardath is packaged in a white box.Both brands are colored gold on the front.Marlboro Lights has a checkered gold rectangle, but Ardath Lights has a quadrangle with a slanted bottom.The packs are close but not identical.-C.B.

Sampoerna Marketing Director Ed Frankel says, "This decree will not work the way it is without modifications....A modification is best for everyone: the industry, consumers, the government and health advocates."

Like Djarum, Sampoerna maintains that the decree calls for too much too fast."We have been preparing for this sort of change for years," he says."Some Sampoerna products are already within these guidelines."Frankel's personal favorite brand, the A-Mild, for example, contains only 15 mg tar.
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Nevertheless, Frankel supports the spirit of the decree.He feels that, eventually, Indonesian tobacco companies will be in line with the world standards, but to force it upon them too fast is wrong.

HURTING THE ECONOMY.Kretek manufacturers further maintain that PP.81 will seriously disrupt the economy.Tobacco is Indonesia's No.1 private employer.The majority of tobacco workers are low-skilled laborers rolling high-nicotine, high-tar kreteks by hand.PP.81 would hurt Indonesia's 700 small tobacco manufacturers the most.Thousands of low-skilled workers will be forced out of work by the decree, adding strain on Indonesia's hurting economy.In addition, some estimate that the government's excise income will be slashed in half by the decree.
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Some, such as Jennings, believe there is no turning back from PP.81, while others, such as Hardjo from Djarum and Zax and Frankel from Sampoerna, think it is impossible for PP.81 to be enforced as currently written.

Sampoerna Marketing Director Ed Frankel says , This decree will not work the way it is without modifications.... A modification is best for everyone : the industry , consumers , the government and health advocates..

Like Djarum , Sampoerna maintains that the decree calls for too much too fast.We have been preparing for this sort of change for years , he says.Some Sampoerna products are already within these guidelines. Frankel's personal favorite brand , the A-Mild , for example , contains only 15 mg tar.However , the company's best-selling brand , the potent nonfilter kretek Dji Sam Soe , would be forbidden under the decree.Nevertheless , Frankel supports the spirit of the decree.He feels that , eventually , Indonesian tobacco companies will be in line with the world standards , but to force it upon them too fast is wrong.

HURTING THE ECONOMY.Kretek manufacturers further maintain that PP.81 will seriously disrupt the economy.Tobacco is Indonesia's No.1 private employer.The majority of tobacco workers are low-skilled laborers rolling high-nicotine , high-tar kreteks by hand.PP.81 would hurt Indonesia's 700 small tobacco manufacturers the most.Thousands of low-skilled workers will be forced out of work by the decree , adding strain on Indonesia's hurting economy.In addition , some estimate that the government's excise income will be slashed in half by the decree.
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Some , such as Jennings , believe there is no turning back from PP.81 , while others , such as Hardjo from Djarum and Zax and Frankel from Sampoerna , think it is impossible for PP.81 to be enforced as currently written.