Surabaya, 12 November 2021 – PT Avia Avian Tbk, better known as Avian Brands, the market leader in Indonesia's decorative paint industry, with a total market share of approximately 20% based on sales revenue in 2020 generated from decorative paints and coatings products and the only local brand among the top three market players in Indonesia, according to Frost & Sullivan, is holding an initial public offering (IPO) by offering a maximum of 10% of its shares to the public, both domestic and international investors.
Avian Brands appointed Morgan Stanley, UBS, and Credit Suisse as joint global coordinators, and PT Mandiri Sekuritas as the domestic lead underwriter.
As planned, the roadshow and initial offering (bookbuilding) for Avian Brands shares will be held from 12 to 18 November 2021. The effective statement from the Financial Services Authority (OJK) is expected to be issued on 29 November 2021. Subsequently, the public offering period is planned to be held from 1 to 3 December 2021, and the share listing on the Indonesia Stock Exchange (BEI) on 7 December 2021.
Avian Brands will use the proceeds from the IPO for working capital, capital expenditure, and repayment of bank debt for Avian Brands and its subsidiaries. These capital expenditure needs include the capital expenditure for Avian Brands' new third manufacturing facility in Cirebon, which is expected to be completed in 2025 and will become Avian Brands' largest manufacturing facility with an estimated production capacity of 225,000 metric tons per year, to support Avian Brands' growth and expansion plans.
"As the market leader in the decorative paint industry, with the most distribution centers in Indonesia as of May 31, 2021, according to Frost & Sullivan's report, Avian Brands is very ready to seize existing opportunities. Avian Brands has a complete portfolio of product variants and has successfully established distribution centers spread throughout the Indonesian archipelago," said Ruslan Tanoko, Vice President Director, in an online press statement in Surabaya, Friday (12/11).
“Currently, Avian Brands has 2 integrated factories. The main factory is in Sidoarjo, East Java, and the second factory is in Serang, Banten. The total collective capacity is more than 286,000 metric tons per year”, added Robert Tanoko, Operations and Development Director.
In addition, as of May 2021, Avian Brands has 96 self-owned distribution centers plus 30 third-party distribution centers. Overall, these distribution centers serve more than 52,000 building material stores spread across Indonesia.
The Tanoko family, supported by a qualified management team, has developed Avian Brands for over 4 decades. Currently, Avian Brands has 4 directly owned subsidiaries and 1 indirectly owned subsidiary. These subsidiaries are PT Tirtakencana Tatawarna, which owns 96 distribution centers, PT Solusi Rumah Praktis, which provides painting services around Jakarta, PT Tirtakencana Batamindo (owned through PT Tirtakencana Tatawarna) with a distribution area in Batam, PT Bangun Bersama Solusindo, which is a joint venture (with 50:50 ownership) with Saint Gobain Group that produces 2-component cement-based waterproofing coatings, and PT Multipro Paint Indonesia, which is engaged in the manufacturing of marine and protective paints.
Avian Brands plans to continue expanding its distribution network and actively seek opportunities for expansion, including joint ventures and mergers & acquisitions. In addition, Avian Brands will always maintain operational excellence and focus on sustainability and corporate responsibility.
Currently, Avian Brands holds the largest decorative paint market share in Indonesia with a market share of 20% for 2020 sales, based on Frost & Sullivan's survey results. Avian Brands also has a strong financial profile with an average sales growth rate above double digits and a profit level exceeding the industry average, with the latest EBITDA margin above 30% (May 2021 period), as well as strong cash flow capability, where the cash conversion rate reached 91% in 2020.
Avian Brands has two business segments. First, the architectural solutions segment, which primarily consists of decorative paints. Second, the trading goods segment, which consists of complementary products.
The architectural solutions segment contributed 79% to sales in 2020 and 92.5% to consolidated gross profit. This segment has a significantly higher profit margin than trading goods. Going forward, these two segments will be maintained to maximize company profit and growth. (*)
About Avian Brands (www.avianbrands.com)
For over 4 decades, Avian Brands has colored the lives of millions of Indonesian families through a variety of products including Sunguard All in One, Supersilk Anti Stain, and Avitex wall paints, No Drop waterproofing coating, and Avian wood & iron paints.
The founder of Avian Brands, Mr. Soetikno Tanoko, began building the paint business in 1978, starting with an 800 m2 factory. Thanks to his hard work and tenacity, the company continued to grow rapidly with an integrated system, so it now has 2 active paint factories with a total production capacity of more than 286,000 metric tons per year as of May 31, 2021. In 2020, Avian Brands completed the construction of a 5,000 square meter building for a research, development, and innovation center called Avian Innovation Center (AIC), and to demonstrate the company's commitment to environmental, health, and safety management in accordance with international standards, Avian Brands has successfully implemented, among others, ISO 14001:2015 and ISO 45001:2018. The existence of Avian Brands aims to provide leading benefits and contribute to coloring Indonesia.
