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Uni-Charm to expand output capacity after biggest IPO
The Indonesian subsidiary of Japanese diaper and feminine-care company Unicharm will use a larger part of the proceeds from its recent initial public offering (IPO), the largest this year, to expand its sanitary napkin and adult diaper production facilities
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he Indonesian subsidiary of Japanese diaper and feminine-care company Unicharm will use a larger part of the proceeds from its recent initial public offering (IPO), the largest this year, to expand its sanitary napkin and adult diaper production facilities.
Uni-Charm Indonesia president director Yuji Ishii said about 60 percent of the Rp 1.25 trillion (US$89 million) generated from the share sales would be used for the expansion of its sanitary napkin and adult diaper production lines.
“Our company is planning to use Rp 800 billion as capital expenditure [capex] to increase our production capacity,” finance director Onishi Junichiro told reporters after the listing of the company’s shares on the Indonesia Stock Exchange (IDX) on Dec. 17.
With the Rp 1.25 trillion raised from the public offering, Uni-Charm Indonesia has become the largest IPO company this year, beating steelmaker company PT Gunung Raja Praksi, which gained Rp 1.03 trillion from its IPO in September.
According to the company’s prospectus published on the IDX website, it operates four factories in Karawang, West Java, and in Mojokerto, East Java, which produce around 8 billion adult and infant diapers, baby wipes and sanitary pads every year with 80.7 percent factory utilization.
Junichiro said the company would not open any new factories anytime soon as it could still utilize its Mojokerto production facility to house the new machines that would be bought for its production expansion.
The company said in a statement that out of the IPO fund, it would allocate 20.6 percent to repay its debts and 14.8 percent for its working capital.
Listed as UCID under the Miscellaneous Industry Index (MISC-IND), the company’s shares reached Rp 1,970 during early trade on Thursday, a 30 percent increase from its IPO price of Rp 1,500.
After the IPO, the company is now 20 percent owned by the investing public and its employees, who have received a stock allocation of 0.04 percent, 59.2 percent by Uni-Charm Japan and 20.8 percent by PT Purinusa Ekapersada.
Uni-Charm Indonesia was the 54th company listed publicly on the IDX this year and the 667th publicly traded company in the IDX’s history. Its IPO was underwritten by PT Sinarmas Sekuritas and Nomura Singapore Limited.
Ishii said the company controlled a market share of about 50 percent for baby diaper products, 46 percent for adult diapers and 42 percent for feminine care products. “For next year, we project that our market size will grow by about 10 percent,” he said.
Last year, the company earned Rp 8.35 trillion in total revenue, of which 82 percent was contributed by the sales of infant diaper products, 13 percent by feminine care products and 5 percent by adult diaper products.
Last year’s revenue was 14.7 percent higher than Rp 7.27 trillion in 2017. It gained a profit of Rp 181 billion in 2018, up 64 percent from Rp 110 billion in 2017.
Earlier in late October, digital advertising firm PT Digital Mediatama Maxima (DMMX) floated its shares on the IDX.
The company sold 35 percent of its shares, equivalent to 2.69 billion shares, to the investing public at a price of Rp 230 per share during its initial public offering during the last week of September. The company raised abouut Rp 618 billion of fresh funds from the IPO.
Digital Mediatama president director Budiasto Kusuma claimed that 75 percent of the funds from the IPO would be used as working capital, while 25 percent are going to be invested in information technology innovation and human resources. (mfp)
