Insider Stories – PT Indofood CBP Sukses Makmur Tbk (ICBP), part of Salim Group and Japanese conglomerate Asahi Group signed Rp 2.2 trillion ($189.3 million) worth of deal to form strategic alliance in bottled water business with Tirta Bahagia Group (TB Group), ICBP said in a statement on Friday.

The statement said the TB Group will transfer its ownership in 22 subsidiaries into two companies – PT Tirta Sukses Perkasa (TSP) and PT Tirta Makmur Perkasa (TMP) –, which are jointly controlled by ICBP, Asahi and the TB Group itself.

The transaction means the three giant groups are forming a strategic alliance in the manufacturing, packaging, marketing and distribution aspects. The 22 companies operate 19 factories in Indonesia.

“We are excited with this acquisition as it will accelerate our entry into bottled water, the largest category of non-alcoholic beverage market in Indonesia,” said Anthony Salim, “ President Director and Chief Executive Officer of ICBP.

“The entry into bottled water market will further increase our beverage portfolio following our recent acquisition of PT Pepsi-Cola Indobeverages, exclusive bottler of PepsiCo Inc. in Indonesia [that] offers Pepsi brand carbonated drinks and juice beverages. In addition, it will also allow us to build a scalable beverage business; hence placing us in better position in the market,” he said.

The TB Group has been involved in manufacturing bottled water in Indonesia since 1987 and owns “Club” bottled water trade-mark.
Attracted with the prospects in the business, in 2012, ICBP and Asahi formed alliance with PT Multi Bahagia, which is part of the TB Group.
The three group formed TSP, which operates as 80 percent subsidiary of PT Asahi Indofood Beverage Makmur (AIBM) and 20 percent unit of Multi Bahagia. TSP is tasked to handle bottled water production. AIBM is a vehicle company of ICBP and Asahi.

For the marketing and distribution aspects, the three group established TMP, which is a 80 percent unit of PT Indofood Asahi Sukses Beverage (IASB) and 20 percent unit of Multi Bahagia. IASB is also a joint venture between Indofood and Asahi.
The statement said the transaction is expected to be completed no later than the end of the first quarter next year and it will be financed from ICBP’s internal funds as well as bank loans.

ICBP, a unit of PT Indofood Sukses Makmur Tbk (INDF), is one of the leading company that manufactures noodles, snack foods, foods seasoning, dairy, nutrition and biscuits.

Source: ICBP