Uni-Charm Indonesia plans to sell 831 million new shares or 20 percent of the company's enlarged capital at Rp 1,400-1,800 a piece. (Antara Photo/Sigid Kurniawan)

Diaper Maker Uni-Charm Indonesia Set for $106m IPO in December

NOVEMBER 26, 2019

Jakarta. Uni-Charm Indonesia, the country's largest baby diaper maker, is seeking to raise up to $106 million from an initial public offering next month, with plans to use most of the proceeds to expand its business and a small portion of it to pay back debts.

This would be the first IPO undertaken by a Unicharm Corporation subsidiary outside Japan.  

Uni-Charm Indonesia plans to sell 831 million new shares or 20 percent of the company's enlarged capital at Rp 1,400 (10 cents)-Rp 1,800 apiece.

The price range reflects a valuation of 12.4 to 16 times the company's earnings. It is expected to be able to raise between Rp 1.16 trillion and Rp 1.49 trillion from the IPO, according to Sinarmas Sekuritas, the lead underwriter.

Sinarmas arranged a book building for Uni-Charm Indonesia on Nov. 25-Dec. 3 to gauge investors' interests for the IPO. 

"We are assisted by Nomura Singapore as the international selling agent. We will offer the shares to investors in Singapore, Hong Kong and Japan," Datin Rashidah Mahadi, an associate director at Sinarmas Sekuritas, said on Monday. 

The public offering will be held on Dec. 12-13 and the company hopes to list its shares on the Indonesia Stock Exchange on Dec 20. 

Yuji Ishii, the president director of Unicharm Indonesia, said the company intends to use 64.6 percent of the IPO proceeds for capital expenditure, buying more machines to produce sanitary pads and baby diapers. In the next two to three years, the company will focus on increasing the capacity at the company's four factories and subsidiaries, he said. 

Uni-Charm Indonesia would also use 20.6 percent of the proceeds to pay back debts and put the remaining 14.8 percent back in the company as working capital. 

The company's total liabilities are at Rp 4.12 trillion, total equity Rp 3.11 trillion and total assets Rp 7.24 trillion. 

Junichiro Onishi, the finance director of Uni-Charm Indonesia, expected the company's debt to equity ratio to remain the same even if some of the IPO proceeds were used to pay back debts.

The company is also targeting sales to increase by 10 percent next year. Uni-Charm Indonesia posted a net sales of Rp 6.25 trillion in the first nine months this year, up 3.3 percent compared to Rp 6.05 trillion in the same period last year. The company's earnings before tax were Rp 468 billion, jumping 141 percent from Rp 194 billion last year.

It plans to distribute a dividend of 20 percent of its 2019 net income, to be paid out in 2020.

Uni-Charm Indonesia was established in 1997 as a joint venture between Unicharm Corporation and Purinusa Ekapersada, a part of the Sinarmas Group. Unicharm controls 74 percent of the Indonesian unit and Purinusa the remaining 26 percent. 

Uni-Charm Indonesia manufactures baby diapers under the MamyPoko brand, Charm brand sanitary napkins and Lifree adult diapers. According to the latest company data, each of these brands control a market share of 50 percent, 42 percent and 46 percent respectively in Indonesia.