‘Jamu’ maker to list
on stock market

 

 

 

 

Tassia Sipahutar, The Jakarta Post, Jakarta | Headlines | Tue, November 19 2013, 9:44 AM

Nanang Haroni does not look like a typical jamu (herbal medicine) drinker, a beverage traditionally associated with older, somewhat more wrinkled, consumers. The 40 year-old is modern-looking, sharply-dressed and teaches at a private university in Jakarta.

“I drink jamu at least once a week to maintain my fitness,” he said.

Nanang is one of tens of millions of Indonesians who resort to jamu as a way to preserve their health. Data from the Health Ministry shows that in 2010, around 95 percent of the country’s population had used herbal medicines in one form or another. The data also revealed that at least 4.5 percent of the population consumed jamu on a daily basis and 50 percent consumed it occasionally.

Indah Yuning Prapti, director at the ministry’s research and development center for medicinal plants and traditional medicine, said that the figure had most likely risen since 2010, citing a higher tendency toward jamu consumption among Indonesians.

“The potential for developing jamu is also huge because we have so far only used around 1,500 plant species for jamu production. That is equal to 20 percent of our total species,” she said.

This same potential is apparently the reason behind jamu maker PT Sido Muncul’s decision to enter the stock market.

In an effort to grab a wider market share, the jamu maker is looking to go public in December, marking the first step by the traditional jamu business into the modern capital market.

According to Sido Muncul president director Irwan Hidayat, the company plans to go public to finance its business expansion since demand for jamu has surged over the past few years, especially in the domestic market.

“Demand for our herbal cold [masuk angin] medicine, Tolak Angin, products has increased and we feel that it is time for us to boost production capacity,” he told reporters at a press conference on Monday.

Sido Muncul, known for its Tolak Angin and Kuku Bima energy drink, plans to issue a maximum 1.5 billion shares, representing 10 percent of its enlarged shares, during an initial public offering (IPO), slated to take place from Dec. 9 to 12.

It is expected to reap between Rp 810 billion (US$69.66 million) and Rp 990 billion as the price of the shares will be set at between Rp 540 and Rp 660.

It has appointed PT Kresna Graha Sekurindo and PT Mandiri Sekuritas as underwriters for the IPO. Once the company lists its shares on the Indonesia Stock Exchange (IDX) on Dec. 18, it will have the honor of becoming the first ever jamu producer on the stock market. According to its prospectus, about 56 percent of the IPO funds will be used as working capital, 42 percent will be channeled to finance its expansion and the remaining 2 percent will go toward its information technology system development.

Sido Muncul finance director Revi Firmansjah said that 55 percent of the funds allocated for expansion would be used to finance the construction of a new factory in Semarang, Central Java. The new factory is expected to double its Tolak Angin production capacity by 2016.

Capacity stands at 70 million sachets per month as of now. Besides the construction of a new factory, the expansion funds will also be used to build a warehouse and purchase machinery.
Irwan said that the expansion would hopefully maintain the company’s dominance of the market in traditional herbal cold remedies.Consultant firm Capricorn Indonesia Consult reports that 1,358 jamu producers operated in Indonesia at the end of 2012. Between 2008 and 2012, the national production of herbal cold remedies increased by 34 percent on average per year, while that of energy drinks rose by 23.9 percent annually.

Overall, jamu consumption during the period surged by around 35.1 percent per year.