Industri Jamu dan Farmasi Sido Muncul, Indonesia’s largest herbal medicine company, is looking to raise as much as Rp 990 billion ($85 million) in an IPO

November 20, 2013 Leave a comment

Tolak Angin Maker Targets IPO

By Francezka Nangoy on 10:49 am November 19, 2013.

Sido Muncul president director Irwan Hidayat. (JG Photo/Dhana Kencana)

Dhana-Kencana_Dirut-Sido-M

Industri Jamu dan Farmasi Sido Muncul, Indonesia’s largest herbal medicine company, is looking to raise as much as Rp 990 billion ($85 million) in an initial public offering in December to help financing planned investment. In a meeting on Monday, the company announced that it would offer 1.5 billion shares, or a 10 percent stake, in a first-time share sale in early December.The company is looking to set the indicative price range between Rp 540 and Rp 660 apiece, meaning the company could rake in Rp 810 billion to Rp 990 billion.

Widely known as Sido Muncul, the firm will start offering the shares on Dec. 9-12, before being listed on Jakarta stock exchange from Dec. 18.

Kresna Graha Sekurindo and Mandiri Sekuritas have been hired to underwrite the offering.

Revi Firmansjah, finance director of Sido Muncul, said 56 percent of the proceeds would be used for working capital, 42 percent for investment and 2 percent to improve IT systems.

Revi said the working capital would be used to purchase raw materials and packaging materials.

The company is also looking to invest in the expansion of its 10-hectare Tolak Angin (a herbal medicine product) factory near Semarang, Central Java.

The expansion would be done in stages, he added, and scheduled to be finalized by the end of 2015.

“We have already ordered machines [for the Semarang plant], which we hope to start operating next year,” Revi explained, adding permission had been received to go ahead with the expansion and land purchased.

The company will use other proceeds to boost capital at its units and warehouse expansion.

Sido Muncul president director Irwan Hidayat said he hopes the future capacity will secure the company’s position as the largest herbal medicine company in Indonesia.

He said the company has a production capacity of 780 million sachets of Tolak Angin per year and they were aiming to double the output by the end of 2015.

Market leader Tolak Angin, which literally means “Deny Wind” in Indonesian, is a herbal medicine used to fight the common cold and boasts approximately 75 percent market share.

Herbal medicine consumption in Indonesia rose by an average 35 percent per year between 2008 and 2012 and is expected to grow by 34 percent in the next five years, according to research company Capricorn Indonesia Consult.

Sido Muncul, founded in 1951, also produces an energy drink called Kuku Bima, which boasts 60 percent of that particular market.

Herbal medicine makes up 40.8 percent of the company’s revenue, while energy drinks contributes 43.3 percent.

The company’s revenue rose 4 percent to Rp 1.39 trillion in the first half this year from a year earlier

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