Indonesian paint maker Avian said to plan US$250mil IPO

JAKARTA: PT Avia Avian, Indonesia’s second-biggest local paint manufacturer, is planning a domestic initial public offering (IPO) that could take place as soon as the end of this year, according to people with knowledge of the matter.

Avia Avian is working with investment banks on the share sale, which could raise about US$250mil, the people said, asking not to be identified because the information is private. Most of the offering would consist of new shares being sold to support the company’s expansion in Indonesia, one of the people said.

The funding could help Avia Avian better compete with Akzo Nobel NV’s Dulux products and Nippon Paint Holdings Co’s Vinilex brand in the largest South-East Asian economy. The Indonesian company joins Thai paint producer TOA Group in seeking a listing this year, as a growing middle class in the region boosts demand for home decoration products.

Avia Avian was the second-biggest local manufacturer in Indonesia’s US$2bil market for paints and varnishes during 2015, trailing only PT Propan Raya Industrial Coating Chemicals, according to data from Euromonitor International. In addition to its namesake “Avian” brand, it also makes “Lenkote” primers, “Avitex” paints and “No Drop” coatings.

The company, founded by Soetikno Tanoko, started operations in 1978, according to its website. Avia Avian hasn’t made a final decision to pursue the offering, and plans could change or be delayed, the people said.

A representative for Avia Avian said she couldn’t immediately comment.

Any share sale would add to the US$7.3bil raised from IPOs in South-East Asia last year, according to data compiled by Bloomberg. TOA Group, controlled by Thailand’s Tangkaravakoon family, is working with banks on a possible listing of its paints and chemicals business that could raise at least US$400mil in 2017, a person with knowledge of the matter said in May. – Bloomberg