Sunday, 26 January 2014


Having performed well at the stock hall, PT Sido Muncul Tbk [SIDO] started to drum up investors to buy their shares. It came as no surprise now investors responded positively to company’s IPO as seen in the outcome of initial book building which was over subscribed by 11.4 times.

Irwan Hidayat, President of Sido Muncul in his open presentation at the BEI building on Friday [10/1] mentioned that the company had booked Rp 870,000.000.000.- with IPO cost of Rp 22,443,245,436 making net income of Rp847,556,743,564.

By December 10, 2013 the IPO fund used came to Rp210 billion as working capital. As planned, the fund would be used as working capital to the amount of Rp 474,631,776,396 for investment Rp 355,973,832,297 and IT Rp 16,951,134,871.

The carry over amount from IPO was Rp 637,556,743,563 was deposited in some banks, among others Permata Bank, Bukopin, BII, HSBC, Mega Syariah, Mayapada and Mandiri in the form of fix deposit.

Sido Muncul allocated IPO fund 56% for working capital, 42% for investment and the remaining 2% for developing IT system and company’s computerization program. The 42% investment fund was inclusive of capital expenditure budget of 2014.

“Our investment includes expansion of 10 hectares of land around the Tolak Angin factory; price of land was around Rp 1 million per meter, but there has been no price offer from the people. We expect to build raw material factories as per next year.” Irwan remarked.

Admittedly this factory was built gradually. For the first year of building, SIDO was ready to inject fund of around Rp 250 – Rp 300 billion, while the rest would be used by early 2015 for completion of factory.

This projected which was built on a 36 hectare land was ready to begin, as the company already had additional 10 ha of land in the old factory site. Previously Sido Muncul only had 26 ha of factory site, and by end of 2013 increased land possession by 10 ha to become 36 ha.

As soon as this new factory was operational, company’s capability to evaporate production was materials increased to 20,000 liter per hour against the present evaporation capacity only 11 thousand liters per hour.

Irwan underscored that this raw material factory was designed to step up quality of natural medicines, efficiency, standardization increasing production capacity, shorten distribution chain and added value. Besides it would be used company’s own purpose and soon to be offered to companies local or foreign who were interested in buying herbal raw materials from the company.

Irwan disclosed that in 2014, the company sets target to book sales of Rp 2.8 trillion making net profit of Rp 450 billion. The target could be met with increased company’s production capacity, capacity of raw materials would increase by four fold and two fold for Tolak Angin. “Our net profit would reach Rp 450 billion next year with this increase,” he said.

Today Sido Muncul commanded over 70% of jamu market share in Indonesia. Today, the company was preparing to launch healthy drink and herbal drink as jamu. The company would renovate the existing products. “Perhaps we could realize it by February next.” Irwan said.

To draw consumers attention, Sido Muncul would improve brand image of 200 products. Soon they would be developed into herbal drinks. So the jamu appearance would be changed into herbal appearance.

The effort was based on the experience of 5 years ago when they launched a product delicious by taste. “But since it was packaged under jamu brand it was not successful. So we would improve packaging of 200 products” Irwan concluded. (SS)

Business News - January 17, 2014

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