KKR Buys 12.6% Stake in Indonesia's Nippon Indosari Corpindo
KKR & Co. L.P., the New York-based global investment company that is engaged in a wide variety of sectors including private equity, energy, infrastructure, real estate, credit, and hedge funds, acquired a 12.64 percent stake in Indonesia's largest producer of bread products, Nippon Indosari Corpindo, through KKR's Asian Fund III.
Wendy Yap, President Director and Chief Executive at Nippon Indosari Corpindo, expressed her delight about the new investor in the company. Considering KKR has plenty of experience in the consumer sector, Nippon Indosari Corpindo can benefit tremendously from KKR's knowledge and experience, hence becoming a stronger company in the Indonesian and Asian markets.
The share acquisition of KKR in Nippon Indosari Corpindo shows KKR's positive attitude towards Indonesia. Over the past 18 months, KKR already invested in Indonesian agri-company Japfa Comfeed Indonesia (now controlling a 11.98 percent stake in this company) and on-demand mobile platform GO-JEK. KKR is particularly positive about Indonesia's consumer sector and therefore seeks partnerships with strong Indonesian companies that deliver premium, high quality products to consumers.
Nippon Indosari Corpindo, the leading pioneer in Indonesia's mass-produced, branded bread segment (famous for its Sari Roti brand), is one of the more ambitious companies in Indonesia, looking beyond borders. Earlier this week, Nippon Indosaro Corpindo announced that it reached an agreement with Caffe Bene, South Korea's biggest coffeehouse chain. Through this agreement the Indonesian company, listed on the Indonesia Stock Exchange, becomes the exclusive supplier of pastry and cake products to all of the Caffe Bene's outlets that are located in South Korea, effective per December 2017.
Domestically, Nippon Indosari Corpindo's products are distributed across an extensive network in Indonesia, consisting of 67,000 sale points, comprising both modern trade and general trade distribution channels.
By 10:20 am local Jakarta time on Thursday (26/10), shares of Nippon Indosari Corpindo were up 4.72 percent to IDR 1,330 a piece.
However, so far this year the company's shares have fallen around 20 percent, with a massive drop occurring between mid-May and early July 2017. This fall was attributed to its bleak corporate earnings. In H1-2017 Nippon Indosari Corpindo's sales fell 1 percent (y/y) to IDR 1.2 billion, while its net profit tumbled 64 percent (y/y) to IDR 46 billion. The drop in net profit was caused by the decline in sales, while there was also an increase in operational expenses because of higher employee salaries. In addition, there was a burden from the increase in the number of new products that are launched in 2017 coupled with the expansion in its distribution networks.
Stock Quote Nippon Indosari Corpindo - ROTI: