Coconut producer Axelum eyes expansion to hit up to 20% growth

Axelum Resources Corp., a coconut product manufacturer and exporter, which is set to launch its initial public offering (IPO) next month, is gearing up for aggressive expansion here and abroad in a bid to achieve up to 20-percent growth over the next two years.

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EDGE DAVAO THE ECONOMY

Company president and chief operating officer Henry Raperoga said they intend to use the majority of the net proceeds from the IPO to facilitate expansion plans and boost sales, as the firm banks on the global wave of health and wellness trends.

“We will expand distribution network so we can penetrate markets we are currently not serving and to deepen our presence in the markets that we are already in,” he said in a press briefing on Tuesday.

Raperoga noted the company operates distribution hubs in Atlanta and Melbourne, Australia; and plans to set-up similar hubs in West Coast Canada, South America, and Europe.

“In the Philippines, we are currently selling our products in Metro Manila and portions of Luzon. We plan to expand into Visayas and Mindanao by appointing distribution partners in key cities,” he said.

Raperoga said they will establish new factories within its 22-hectare facility located in Medina, Misamis Oriental.

“We are inaugurating another coconut milk powder plant that will give us another 10 metric tons in capacity. This new facility, we will be gearing this towards more on personal care products,” he added.

Raperoga pointed out that export markets currently comprise 88 to 90 percent of the company’s total revenues, with the United States and Australia as its top markets.

Axelum Resources posted over PHP5.8 billion in revenues in 2018.

Raperoga said the company also aims to produce new products such as concentrated coconut water, fresh coconut water drink, and coconut coffee creamer. Its largest products are desiccated coconut and coconut water.

“Further down the line, we will acquire companies that can further enhance our sales and manufacturing capabilities. The timing of such acquisitions will depend, however, on finding good acquisition targets with synergies and business plan fit well with Axelum,” he said.

Raperoga bared they are in talks with one smaller company in Vietnam and two local producers for possible acquisition.

“We still have to do due diligence,” he added. “We are not earnestly looking but we are being approached to look at the possibility.”

Apart from expansion plans, Raperoga said the company will also use some of the IPO proceeds to pay down its loans and reduce payables to lower financing cost.

Meanwhile, Axelum Resources will be offering a total of 1.13 billion shares at a price of up to PHP6.81 a-piece.

The company is looking to raise as much as PHP7.7 billion through an IPO this October 7.

First Metro Investment Corporation, the investment banking arm of the Metrobank Group, is the issue manager, bookrunner and joint lead underwriter of the IPO. BPI Capital Corporation is also joint lead underwriter. (PNA)

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