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% 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, or between $82 and $108 million, from the IPO, according to Sinarmas Sekuritas, the lead underwriter.

Sinarmas arranged a book building for Uni-Charm Indonesia on November 25-December 3 to gauge investors’ interests for the IPO. The public offering will be held on December 12-13 and the company hopes to list its shares on the Indonesia Stock Exchange on December 20. 

Yuji Ishii, the president director of Unicharm Indonesia, says the company intends to use 64.6% of the IPO proceeds for capital expenditures, 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% of the proceeds to pay back debts and put the remaining 14.8% back in the company as working capital. 

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% of the Indonesian unit and Purinusa the remaining 26%. 

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%, 42% and 46% respectively in Indonesia.