Indofood plans palm unit IPO

The Jakarta Post, Jakarta

Giant instant noodle maker PT Indofood Sukses Makmur is set to launch an initial public offering (IPO) for its crude palm oil business.

The publicly listed company's president director, Anthoni Salim, said that the IPO plan had been adopted to take advantage of strong investor appetite in the crude palm oil (CPO) industry.

"We find that investors are very interested in the CPO sector," he was quoted by news portal detik.com as saying after a shareholders meeting Friday.

He did not elaborate, but company vice president Kevin Sietho said the IPO would be held in the near future. "Time is of the essence. We will hold the initial public offering soon," he said.

Prior to the IPO, Anthony said that Indofood would first merge 11 of its CPO business units.

The eleven companies to be merged are PT Salim Ivomas Pratama, PT Inti Boga Sejahtera, PT Sawitra Oil Grains, PT Kebun Ganda Prima, PT Citranusa Intisawit, PT Gunung Mas Raya, PT Indriplant, PT Cibaliung Tunggal Plantations, PT Serikat Putra, PT Bitung Manado and PT Argha Giri Perkasa.

Elsewhere, Anthoni said that Indofood had allocated Rp 700 billion (US$76 million) for capital expenditure in 2006, with the money coming from bank loans and operating income.

He said that the company would spend Rp 200 billion of the total planned capital expenditure on acquiring new palm oil plantations as part of its strategy to acquire a total of 250,000 hectares of plantation land by 2015.

Friday's shareholders meeting approved a 2005 full-year dividend of Rp 42.6 billion, or Rp 5 per share.

Anthoni predicted that Indofood's noodle sales this year would rise by 20 percent from 9.5 billion packages last year.

Anthoni also said that Indofood would diversify its energy sources as part of a cost-cutting strategy due to the continuing high oil prices on the international market.
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