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Textile chemical manufacturer of Adidas and Nike products, PT ChemStar Indonesia Tbk (CHEM) views that business prospects in the textile and textile products (TPT) industry are getting better, so the company decided to conduct an initial public offering (IPO). According to the President Director of ChemStar Indonesia, Kwee Sutrimo in a press release launched in Jakarta, Monday (27/6), currently the direction of domestic and global economic recovery is getting better, so this condition will encourage an increase in demand for industrial products.

He conveyed that the prospect of domestic consumption recovery would strengthen demand for textile products, one part of the supply chain being chemical products for the textile industry.

Sutrimo believes that CHEM will be an important part of the revival of the domestic industry after the Covid-19 pandemic which is gradually recovering and leading to endemic.

ChemStar, which is located in Purwakarta, West Java, has the potential to become one of the important links in the Indonesian textile industry.

In developing its innovations, one of Chemstar's products is a supporting material for High Performance Textile Effects, such as Indonesian military uniforms which have an anti-mosquito function to uniforms that have anti-fire features.

Meanwhile, for sports apparel brands, ChemStar has anti-microbial products to reduce the growth of bacteria in sportswear.

"There are also coating products for special quick dry materials which are mandatory for various sports apparel. These innovative products will continue to be CHEM's mainstay in developing the domestic textile business,” said Sutrimo.

He further ensures that, all ChemStar products are environmentally friendly products, with complete technical services that meet quality standards, so that they are trusted by global brand manufacturers such as Adidas, Nike, Uniqlo to Marks & Spencer.

With these various advantages, CHEM's business prospects are considered as one of the potential industries, along with the increasing mobility and purchasing power of the people.

The Ministry of Industry noted that the textile industry has great potential, because the performance of the garment industry in 2022 will be in the green zone for the first time during the pandemic or grow 5.84 percent annually and will continue to increase.

As a company engaged in the chemical industry, most of the products sold by CHEM are products with special specifications ordered through the business to business system and only a small portion is available in the market.

CHEM's IPO is considered a promising offer, because the price earning ratio (PER) is 20x at Rp150 per share and with a price book value (PBV) of 2.2x. Currently PER IDX is in the range of 15x. CHEM also plans to issue 250 million Series I Warrants or a maximum of 20.83 percent of the paid-up capital.

Series I warrants are given free of charge to the company's new shareholders whose names are recorded in the CHEM's Register of Shareholders (DPS) on the allotment date, with a ratio of 2:1.

Sutrimo added that CHEM's positive performance was also supported by the company's cooperation with global suppliers, with ChemStar status as a distributor of international chemical companies, such as Tanatex Chemicals Holland and Transfar International China.

Citing the projections of the Indonesian Filament Fiber and Yarn Producers Association (APSyFI), CHEM's management said that the textile industry in 2022 will grow 10 percent, driven by improved production capacity utilization and increased domestic market demand.

The delay in textile imports from China due to the energy crisis and high shipping rates are one of the reasons for the increase in domestic market demand in 2023.