Kino to Diversify Its Business into Pet Food Segment
JAKARTA, 13th February 2018 – PT Kino Indonesia Tbk (“Kino”) had signed a joint venture agreement with Wah Kong Corporation Sdn Bhd (“WKC”), a company with 16 subsidiaries specialize in distribution, retail, e-commerce, warehousing & logistics, confectionery, and pet food field. Kino and WKC will jointly establish two joint venture companies, namely PT Kino Pet World Indonesia and PT Kino Pet World Marketing Indonesia that will conduct the business in Indonesia, in which Kino will be the majority shareholder with 51% share ownership in both joint venture companies. Kino together with WKC will build a continuous relationship with the production and importation of pet food products owned by WKC to be sold by joint venture company in Indonesia. Hence, this cooperation will be beneficial, as it will bring revenue contribution to both parties.
The promising growth potential of pet food industry in Indonesia, supported by the increase in the number of pet owners are some of the factors that can bring additional value to both parties in this joint venture. WKC is one of the pioneer and Malaysia’s largest player in terms of the sales of pet food products through the dog and cat food made from natural ingredients and formulated to fulfill the nutrition of pets. This industry offers broad business prospect growth with a low penetration level, so factors like the growth of middle class population, stronger purchasing power, and more educated pet owners who pay more attention to the well being and health of their pets will boost the growth of this industry in the long run. The establishment of this joint venture company is in line with Kino’s strategy in diversifying its business towards a segment with huge growth prospect.
WKC products have strong brand equity and reputation amongst the pet owner communities in Malaysia and also outside Malaysia, as proven by the establishment of Pet World (Thailand) Ltd in Thailand as the form of expansion to international market. WKC also has the good chance to grow in Indonesian pet food market with the strong support from Kino, which has been regarded as a perfect partner to expand the business outside Malaysia. The capability of Kino in distribution, product innovation, and financial position will complement the strength of WKC in expanding to Indonesian market. The existence of good and continuous cooperation will convey a satisfactory and beneficial output to both parties.
The establishment of joint venture companies with WKC is a part of diversification business plan implemented by Kino as a way to develop inorganically, after several corporate actions such as brand acquisition of Dua Putri Dewi, business acquisition of Ristra Group, and joint venture establishment with Malee Group had been done. Post the formation of joint venture companies, the financial report of PT Kino Pet World Indonesia and PT Kino Pet World Marketing Indonesia will be consolidated in parent company level, so Kino could improve its overall performance. This is part of efforts executed by Kino to keep adding value to consumers towards various products.
The establishment of joint venture companies will be funded from initial public offering proceeds that had been allocated as capital injection in companies on related industry to support the inorganic growth of Kino, as mentioned in prospectus of Kino.
About PT Kino Indonesia Tbk.
PT Kino Indonesia Tbk. is a locally well-known company in Indonesia which produces consumer goods (Fast Moving Consumer Goods – FMCG). Kino Group had been established since 1991.
Kino manufactures consumer goods that consists of 4 main business segments including personal care, beverage, foods, and pharmaceutical with several reputable and market leader brands, for instance Ellips, Ovale, Larutan Cap Kaki Tiga, Resik-V, Sleek, and other brands under Kino Group. In accordance with the motto of “Innovate Today”, Kino will keep on innovating its products.
As a part of Kino Group, PT Dutalestari Sentratama that engages in distribution field has been developed significantly in distributing products to the entire Indonesia region. Moreover, Kino Group also consists of PT Morinaga Kino Indonesia (a joint venture company with Morinaga & Co. Ltd. (Japan)) that manufactures foods and confectionery products, PT Ristra Laboratoris Indonesia that manufactures cosmeceutical products under the brand of “Ristra” and PT Ristra Klinik Indonesia that offers beauty care service (both are the joint venture companies with Ristra Group), and PT Kino Ecomm Solusindo that markets several personal care products through digital platform as a step in capturing the potential rapid growth of e-commerce field.
Furthermore, Kino also reaches other countries outside Indonesia region through share ownership, either directly or indirectly, on companies namely Kino Care (M) Sdn. Bhd. in Malaysia, Kino Consumer Philippines Inc. in Philippines, Kino International Pte. Ltd. in Singapore, and Kino Vietnam Company Ltd. in Vietnam. Kino Group also engage in distribution cooperation with several distributor networks in Asia region.
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