Bulgartabak's Main 2008 Priority Is Retaining The Market Share

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The main priority for Bulgartabak Holding ()  in 2008 will be to retain its market share, said executive director Hristo Lachev. The company currently controls between 75% and 80% of the market of cigarettes in Bulgaria. Bulgartabak will present its January – September report on Monday.

The holding expects its market share to drop to 70% after the excise hike scheduled January 2008. Lachev did not disclose any details as to how much the prices will go up.

He explained that Bulgartabak has suggested to the government to raise the excise to 64 euros per 1000 cigarettes at three stages for a period of three years.

According to the holding, this year the average priced tobacco has shifted from the Victory brand to the 2 -leva cigarette pack. The only brand that still defies the competition is Prestige. In Bulgaria the official market of cigarettes amounts to 18,000 cigarettes.

The most popular brand names in Bulgaria are the ones in the group of Sredec and Gorna Djumaia (in the mid-price range), Melnik (among low-priced), and EVA (on the market of slim cigarettes). Voctory's position also remains stable.

This year was successful for Bulgartabak, although, the company has not yet retained the levels from two years ago, Lachev also said.

The company's export has grown 80% versus 2006. A total of 25,000 tonnes were sold abroad last year, and this year's export is expected to come to 45,000 tonnes.

This year the company plans to purchase 2,100 tonnes of oriental tobacco, 1,1000 tonnes Virginia tobacco, and 600 tonnes Berklee tobacco.

The Middle East and Africa are the holding's main foreign markets. Interest from Russia is also rising, and the holding has already signed two contracts with Russian distributors. It is also aiming at expansion to Armenia, Kazakhstan, Azerbaijan and some Balkan countries. Expansion to Italy and Austria is still not certain. The holding's export is mainly in USD.

Bulgartabak's restructuring is still continuing. Privatization procedures for the subsidiaries in Yambol and Kardjali will be announced in mid-November. The companies have to be sold by end of December, Lachev also said.

The holding has generated some 45 mln leva (23.008 mln euros) from the sales of nine companies so far, nearly 37 mln leva (18.917 mln euros) of which comes from the sales of Yuri Gagarin and Pazardjik BT. There are ten other enterprises in the holding's structure. Hristo Lachev said he expects that after the local elections decisions will be taken regarding the future of the Stara Zagora-based Slance and Plovdid BT.

Bulgartabak's shares added 3.61% to an average of 35 leva today at a turnover of 2,002 shares.

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