This undated photo shows one of Widodo Makmur Unggas chicken farm facility in Klaten, Central Java. (Photo courtesy of Widodo Makmur Unggas)
Widodo Makmur Group Plots $277m IPO
BY :FARID FIRDAUS
JULY 13, 2020
Jakarta. Widodo Makmur Unggas, an integrated poultry company, mulls a plan to raise Rp 2 trillion, or $139 million, from selling 35 percent of its shares in October, in one of the largest initial public offerings this year.
The company's parent company, Widodo Makmur Perkasa Group, also planned to go public with an IPO of the same size next year, the group founder Tumiyana told the Jakarta Globe's sister publication Investor Daily on Sunday.
"We assess the company will continue to grow in the future and the turnover of the food and animal husbandry sector will continue to increase. Right now is the right conditions for raising equity in the market," Tumiyana said.
Widodo Makmur Unggas has appointed Danareksa Sekuritas, CGS-CIMB Sekuritas, and Samuel Sekuritas Indonesia to act as the underwriters for the offering, which potentially valued the company at Rp 5.7 trillion. That would put Widodo Makmur Unggas far smaller than other listed poultry companies like Charoen Pokphan and Sierra Produce.
Still, Tumiyana was confident of attracting investors' interest in the offering. He said two potential strategic partners from Indonesia and abroad interested in buying up to 10 percent of the shares. Tumiyana declined to disclose the partner names, saying they were still finalizing the terms.
Widodo Makmur Unggas recently signed a partnership with a Japanese company, Fuji Electric Group, to build an animal feed factory worth Rp 650 billion in Ngawi, East Java. The plan is for the plant to be operational in the first semester of 2021, Tumiyana said.
"The factory capacity reaches 140 tons per hour. This effort is one of the company's efforts to encourage growth because the food sector is not affected by Covid-19," Tumiyana said.
Earlier, Widodo Makmur Unggas signed an agreement with The Sandi Global (TSG) Group, TSG Utama Indonesia, and Singapore-based investment group Titan Global Capital to expand the business to Congo, Central Africa.
Widodo Makmur Unggas engaged in breeding, hatchery, chicken feed production, chicken farming, and chicken slaughterhouse businesses in Klaten, Central Java. Its slaughterhouse can process 12,000 chicken per hour.
Widodo Makmur Unggas is part of Makmur Perkasa Group's business lines, which also include integrated cattle farms, slaughterhouses, and production of premium and medium quality rice, and property.
The group projected its asset to grow Rp 4.2 trillion by the end of this year on a consolidated basis, up 20 percent from Rp 3.4 trillion last year.
"If Widodo Makmur Unggas IPO can reach Rp 2 trillion, certainly Widodo Makmur Perkasa's assets will be much bigger than that," Tumiyana said.
Most of Makmur Perkasa Group's revenue comes from its cattle business, Pasir Tengah, which makes up 65 percent of the group sales. Pasir Tengah operates four cow fattening facilities in Cianjur, Cariu, Cileungsi, West Java and Bayat Klaten, Central Java. The total capacity of these farms reaches 135,000 cows per year.
The group's food business, Widodo Food Makmur Sejahtera, sells packaged rice under the Pulosari and Sumur Tujuh brands and also engages soybean imports from the United States, Brazil and Canada. The company uses the Cahaya Makmur brand for its soy products.
Widodo Makmur Perkasa also manages property business through Langgeng Makmur Perkasa. The company's projects include Student Castle Apartment in Yogyakarta and Wismaya Residence in Bekasi, West Java.