The Asian Development Bank (ADB) has subscribed to around 19.4 million shares, worth Rp59.9 billion ($4.2 million), under an 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, improve consumer access to nutritious food, and support the livelihoods of stakeholders across the dairy value chain, including smallholder farmers.
“Dairy is an important industry in Indonesia, as most milk is produced by thousands of smallholder farmers and reliance on imports is significant, as domestic output fails to meet the demand for dairy products,” ADB Private Sector Operations Investment Specialist Carine Sophie Donges noted in a statement here on Monday.
Cimory, which begins trading on the Indonesia Stock Exchange on December 6, 2021, raised Rp3.67 trillion ($255 million) through the offering of shares representing 15 percent of the company’s issued share capital.
“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 affirmed.
Cimory is the holding company of the Cimory Group, a leading manufacturer and distributor of dairy products, in particular yogurt and flavored milk, and consumer foods, such as 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,” according to Cimory President Director Farell Sutantio.
“We have a strong relationship with ADB that 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,” Sutantio noted.
Cimory aims to use the IPO proceeds to finance organic growth of the Cimory Group and expand 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 that the company procured in 2020 and additional five thousand female sales agents from 2,500 that the company partnered with in 2020 in addition to reaching out to an additional 500 thousand households each year from about 200 thousand in 2020. Distribution networks are expected to expand to serve most of Java Island and major centers in Sumatra, Kalimantan, Sulawesi, and Papua islands.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members, with 49 from the region, according to the release.
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Editor : Mahdani
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