Cigarette Maker in Wismilak, Tobacco Markets

Surabaya cigarette maker Wismilak Inti Makmur plans to sell 30 percent of its stake in an initial public offering later this year, in an effort to capitalize on the increasing appetite among investors in the local equities market. The company, whose brands include Wismilak and Galan, has selected Mandiri Sekuritas and OSK Nusadana Securities to help arrange the IPO. The company did not provide other terms such as total estimated funds to be raised from the IPO. Wismilak will join Gudang Garam — the country’s largest clove cigarette maker — as well as Hanjaya Mandala Sampoerna and Bentoel International as tobacco companies on the Indonesian Stock Exchange (IDX). Wismilak, founded in 1962 as Gelora Djaja and adopted its current name in 1994. “Wismilak held a mini public presentation with the Indonesia Stock Exchange,” said Hoesin, a director of the IDX. Indonesia is one of the world’s largest tobacco markets, with very liberal advertising and low tax. Two in three Indonesian men smoke, a recent study found. Several Indonesian companies have undertaken IPOs this year, and others are considering doing so. Among those considering listing later this year are Provident Agro, Citra Borneo Indah and Express Transindo Utama. Express Transindo Utama, which operate Express Taxi, plans to sell between 20 and 40 percent of its shares through an IPO in November. It aims to pick up about Rp 500 billion ($52 million) from the IPO, which it will use to grow its fleet. It is the second-largest taxi operator in Indonesia, behind Blue Bird Group. Express Group was established in 1989 and is owned by the Rajawali Corporation, a holding company of diversified businesses affiliated with Peter Sondakh. Overall, companies whose IPOs are in the pipeline are estimated by the exchange to be aiming to raise up to Rp 6 trillion.