PT Chitose International Tbk (CINT) has big plans to improve the furniture business. The company located in Cimahi, West Java, is planning to build a new plant to increase production capacity chairs, beds, and various variants of their furniture products.
To finance the expansion, Chitose held alias IPO initial public offering (IPO) at the Indonesian Stock Exchange. CINT offer 300 million ordinary shares, equivalent to 30% of the issued and fully paid. The offering price of Rp 330 per share. From this corporate action, CINT reap Rp 99 billion.
Chitose will use 25% of the proceeds to buy land in Jalan HMS Mintareja, Baros Village, District Central Cimahi, Cimahi, West Java. Then about 10% of the IPO proceeds will be used to build factories and warehouses along with operational offices on land it.
The company scheduled the construction of the plant started later than in the first quarter of next year. As a result, the plant could be operational in the first quarter 2016.
Furthermore, Chitose will use 20% of the proceeds for the purchase of machinery and factory equipment, 30% of the IPO proceeds to strengthen its market penetration, as well as 15% of the IPO proceeds for working capital such as the purchase of raw materials and develop research and development.
To strengthen market penetration, CINT will build the flagship shop located in Jakarta, Bogor, Depok, Tangerang and Bekasi (Jabodetabek), and East Java. This shop Flagship will serve as a showroom for the distributor. Shop flagship development will be done gradually began the second half of 2015 and is expected to start operating the second half of 2016.
CINT is currently leading market share in almost all product categories with a trademark Chitose and Yamato, ie for products folding chair, office and working chair and school chair in the domestic market. The only product category CINT with impartial market share to competitors is the product of the hotel, restaurant and food court chair.
Since 2001, CINT has a target to develop new products every year. With the development of new products, CINT has 300 product variants. In 2011, CINT is able to achieve a production capacity of 1 million units per year.
Fadjar Swastyas, CINT finance director, said last year CINT production capacity of about 1.19 million units. CINT will maximize the capacity of the existing plant before the new plant was completed. For that, the issuer will buy facilities and infrastructure in order to support production, such as buying a new machine. â ???? This year we are targeting a production capacity of 1.25 million units, â ???? he said.
CINT is optimistic, the property industry in Indonesia is likely to grow rapidly. It is supported by a variety of factors, such as economic conditions are good, controlled inflation, reduced unemployment and income levels are also increasing.
In addition, a Global Property Guide research on countries in Asia in 2014 put the property market Indonesia is ranked second after the Philippines. This means that Indonesia is a potential market for the property industry in Asia, beating Thailand, Japan and Cambodia respectively in third, fourth and fifth. CINT is also not worry about the limited supply of wood. The reason, of 70% CINT furniture products derived from iron.
Chitose get the opportunity of rampant construction of new shopping centers, apartments and offices, both in Greater Jakarta and other major cities. CINT management states of the office property demand highest growth. For the domestic market, sales of most major products CINT in Jakarta with a share of 18%, followed by Surabaya, Semarang 15% and 13%.
Meanwhile, new export markets CINT contribute 5% of revenue. The majority of export products CINT targeting Japan with a share of 70%. Fadjar admitted, the company is currently planning to gradually increase the contribution of exports to 10%.
Last year, CINT posted Rp 288 billion and a net profit of Rp 43 billion. This year, CINT is targeting revenue and net profit grew respectively 15% and 11%.