Indofood's aggressive expansion strategy

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Related tags: Malaysia

The Indonesian instant noodle and flour maker PT Indofood Sukses
Makmur, claimed it plans to build food factories abroad, following
the company's...

The Indonesian instant noodle and flour maker PT Indofood Sukses Makmur, claimed it plans to build food factories abroad, following the company's strategy for expansion, reports Reuters. Despite a negative economic situation, Indofood​ is expanding heavily. In the past two months, the overall market gained 27 per cent, while Indofood has gained less than seven per cent. According to Indofood's chief executive, the company was in talks with Thailand's large distribution group Berli Jucker to build a food plant, and had plans for similar factories in Australia and Malaysia. Indofood also claimed it would proceed with its acquisition of a plantation firm, even if it cannot guarantee that an agreement to buy Singapore-headquartered palm oil firm Golden Agri Resources would be successful. Indofood earlier last month signed a conditional agreement with Asia Food & Properties (AFP), the parent of Golden Agri, to buy a 30 per cent stake in the firm, with an option to raise it to 55 per cent. There has been speculation regarding the pursuit of this deal as Indofood is still waiting for Golden Agri to provide its latest financial statements so it can conduct due diligence, which should last about 5 weeks. Indofood's aggressive moves could stretch its already high gearing ratio, analysts have warned. Aside from the acquisition, Indofood said it had set aside $81.09m to fund its share buy-back programme, and a maturing debt of $125 million in July. Source: Reuters

Related topics: Market Trends

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