Cimory Milk And Yogurt Producer Will Raise IDR 3.7 Trillion From IPO, What Are The Funds Used For?

Cimory Dairyland. (Foto: Dok. Traveloka)

JAKARTA - The COVID-19 pandemic that has hit the world as it is today, has increased public awareness of the importance of nutritious food and drinks to maintain a healthy body. Yogurt and Milk are some examples of high nutritional consumer products that play a role in maintaining the body's immunity.

It is not surprising that the research institute Euromonitor revealed that the nutritional product categories such as yogurt and milk showed positive growth prospects for the market. Consumption of dairy products in Indonesia tends to grow, although the level of milk consumption per capita in Indonesia in 2020, according to research by Euromonitor, is still US$6.

This amount is still lower than a number of other ASEAN countries such as Malaysia (16 US dollars / capita), Thailand (25 US dollars / capita) and Vietnam (32.0 US dollars / capita). This condition will be an opportunity and have good business prospects for the dairy industry in Indonesia, whose per capita consumption level is expected to almost double to US$ 11.7 by 2025.

This condition gave birth to a commitment from PT Cisarua Mountain Dairy Tbk as a producer of Premium Dairy Products with the Cimory trademark and Premium Consumer Products with the trademarks Besto and Kanzler, to increase production capacity and expand distribution to make it more affordable to meet the needs of nutritious dairy products.

To meet these needs, PT Cisarua Mountain Dairy Tbk will sell 1,190,203,000 shares to the public through an Initial Public Offering (IPO) on the PT Indonesia Stock Exchange (IDX). The number of shares represents 15 percent of the company's issued and fully paid capital with a nominal value of IDR 10 per share.

The initial share price is set at around Rp2,780 to Rp3,160 per share. So that the total IPO proceeds to be raised by the company will reach a maximum of Rp3.76 trillion.

After deducting the issuance costs, the company will use the funds to:

- Approximately 33 percent will be used for capital expenditure related to additional capacity for production facilities in the form of: property, plant, equipment.

- Approximately 25 percent for capital injection to the Subsidiary, namely PT Macroprima Panganutama (MP), a food processing and canning company. The funds will mainly be used by MP to increase capacity for production facilities, as well as for working capital.

- Approximately 20 percent for capital deposit to the Subsidiary PT Macrosentra Niagaboga (MN), a company engaged in agents and distributors. The funds will mainly be used by MN for capital expenditures related to the distribution center expansion plan, as well as for working capital.

- Approximately 15 percent will be used for capital expenditure related to expansion of distribution channels in the form of additions in stores and retail and supporting facilities related to increasing the number of Miss Cimory which includes training and development.

- Approximately 7 percent will be used for the company's working capital to finance daily operational needs.

In this initial public offering, the company has appointed PT CLSA Sekuritas Indonesia and PT Mandiri Sekuritas to act as underwriters for the issuance of securities.

The following is an indication of the transaction schedule until it is listed on the IDX:

- Initial Offering Period: 10 -17 November 2021- Estimated Effective Permit: : 26 November 2021- Estimated Initial Public Offering Period: 30 Nov– 2 Dec. 2021- Estimated Allotment Date: December 2, 2021- Estimated Distribution of Shares Electronically: : December 3, 2021- Estimated Listing Date on the Indonesia Stock Exchange: December 6, 2021

Cimory Profil profile and performance

The Company was established in 2005, with the main business activities in the field of Premium Dairy Products and the leading Premium Consumers in Indonesia. The company has a number of advantages, including the market leader in the yogurt industry. The Company also has a strong position in modern trading and focuses on developing the company's footprint in general trading and an exclusive direct to consumer channel through Miss Cimory.

In addition, the Company's operational model allows setting a premium price for its products. This has contributed to high profitability for the Company, as can be seen from the profit growth for the current period as of June 2021 which reached Rp364.5 billion, growing 798.54 percent from Rp40,566 billion recorded in June 2020. Meanwhile, as of December 2020 profit the current period of Rp. 177,007 billion.

Meanwhile, the Company's net sales as of June 2021 were recorded at Rp. 1.58 trillion, up 115.1 percent from Rp. 735.4 billion in June 2020. The income from net sales as of June 2021 has almost matched the achievement throughout 2020 which amounted to Rp. 1.8 trillion. .

The high profitability growth was partly supported by the company's position as the market leader in the overall yogurt product sub-category as well as in the Spoonable Yoghurt and Yogurt Drinks category, which based on Euromonitor's research results, the company has a market share of 53.2 percent, 71.9 percent and 50.3 percent as of December 31, 2020.

The Company has also built a strong market position for Fresh White Milk products and the sub-category of Cold Processed Meat and Frozen Processed Meat products, ranking 4th as of 2020.