Monde Nissin bets on meat alternatives after record $1 billion Philippine IPO

MANILA (Reuters) -Philippine food maker Monde Nissin Corp is pinning its future on the fast-growing alternative meats business on the back of a 48.6 billion pesos ($1 billion) initial public offering (IPO), which marked the country’s largest-ever listing.

FILE PHOTO: A janitor wearing a face mask cleans the lobby of the Philippine Stock Exchange amid the coronavirus disease (COVID-19) outbreak, in Taguig City, Metro Manila, Philippines, Sept. 30, 2020. REUTERS/Eloisa Lopez

On its market debut on Tuesday, the family-controlled company’s shares ended trading at 13.48 pesos versus the 13.50 pesos IPO price. The issue was Southeast Asia’s second-largest this year after the $1.8 billion IPO of Thailand’s PTT Oil and Retail Business.

The four decade-old group’s market leading position in the Philippines, with its ubiquitous Lucky Me! instant noodles and SkyFlakes biscuits, has propelled the family behind the conglomerate to the ranks of the richest in the Philippines.

The owner of Britain’s meat alternative Quorn, which it acquired for about $830 million in 2013, is ramping up capacity and is also targetting a big jump in sales in U.S. markets.

“We still have a lot of possibilities to raise even more (capital) in the next few years,” Henry Soesanto, CEO of Monde Nissin, told Reuters in an interview.

Bringing in strategic investors in its Quron business at a later stage might be one of the options to raise more funds, Soesanto said.

The global meat substitutes market has surged in recent years on consumer concerns about health, sustainability and animal welfare, helping firms such as Beyond Meat and Impossible Foods to attract record investments.

Quorn contributed 22% to Monde Nissin’s net sales of $1.4 billion last year.

“We are going to push very, very hard and invest significantly to grow the top line,” said David Nicol, chief strategy officer at Monde Nissin, adding Quorn was also developing local flavours for U.S. markets.

“There will be explosive growth,” he said, citing industry studies stating the protein market will grow multifold over the next couple of years.

The oversubscribed IPO was supported by 11 cornerstone investors including Singapore sovereign wealth fund GIC and fund managers Eastspring Investments and Capital Group.

Monde Nissin’s IPO comes as the Philippines, a historical laggard in Southeast Asia in terms of fundraisings, is set to emerge as the region’s biggest IPO market this year. [L4N2KO1J8]

The company’s shares were the most actively traded on Tuesday and rose as high as 13.56 pesos. Monde Nissin ended the day with a market value of $5 billion in a steady broader market.

Analysts previously said the food maker had priced its IPO conservatively in a market that so far this year has lost 7%, making it the region’s worst performer.

($1 = 47.68 Philippine pesos)

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