Jakarta: The Asian Development Bank (ADB) has subscribed to around 19.4 million shares, worth 59.9 billion Indonesian rupiah ($4.2 million), as part of the initial public offering (IPO) of PT Cisarua Mountain Dairy Tbk (Cimory) on the Indonesia Stock Exchange.
The ADB proceeds will support the company’s efforts to expand its production capacity of dairy products, improving consumer access to nutritious food, and supporting livelihoods of stakeholders across the dairy value chain, including smallholder farmers.
Cimory, which begins trading on the Indonesia Stock Exchange on 6 December 2021, raised 3.67 trillion Indonesian rupiah ($255 million) through the offering of shares representing 15% of the company’s issued share capital.
"Dairy is an important industry in Indonesian economy as most milk is produced by thousands of smallholder farmers and reliance on imports is significant as domestic output fails to meet demand for dairy products," said ADB Private Sector Operations Investment Specialist Carine Sophie Donges in a press release on Monday.
"Through this investment, ADB and Cimory are able to work together to improve farmer livelihoods and rural welfare, promote gender inclusion, and make a significant contribution to food security," Donges added.
Cimory is the holding company of the Cimory Group, a leading manufacturer and distributor of dairy products (in particular yogurts and flavored milk) and consumer foods (processed meat and egg-based products) with well-established household brands in Indonesia.
"We are delighted to have ADB participate as an anchor investor in our IPO," said Cimory President Director Farell Sutantio.
"We have a strong relationship with ADB, who provided a loan to Cimory at the start of the pandemic last year, and we look forward to continuing to work with ADB to add value to our business on its environmental, social, and governance dimensions, including gender inclusion and reducing its carbon and environmental footprint," he added.
Cimory intends to use the IPO proceeds to finance the organic growth of the Cimory Group, expanding its production and distribution capacities by 2024. This expansion is expected to benefit an additional 4,200 dairy farmers (from a baseline of over 9,800 the company procured from in 2020), additional 5,000 female sales agents (from 2,500 the company partnered with in 2020), reaching out to additional 500,000 households each year (from about 200,000 in 2020). Distribution networks are expected to expand to serve most of Java island and major centers in Sumatra, Kalimantan, Sulawesi, and Papua islands.