Crown Asia Chemicals Corp. expects up to 10 percent growth in profits and revenues this year, buoyed by plans for expansion to be financed by the P222 million proceeds to be raised from its initial public offering, the company president said on Wednesday.
Eugene Lee Villanueva said the strong performance of the property and construction sectors should lead to more sales for Crown Asia’s pipes business.
He said Crown Asia is looking at “eight to 10 percent growth” in net income and revenues as the company doubles its current rated capacities by the second half of 2015.
The company supplies pipes to high-end real estate players such as Ayala Land Inc., DMCI Holdings Inc. and Federal Land.
Crown Asia corners about 15 percent of the pipes market in Metro Manila and Luzon. But the company has started expanding to Visayas and Mindanao.
Villanueva said the company hopes to be number one in the chemical compounds and pipes business in a span of five years, taking advantage of the “transparency” and “credibility” that a company acquires after it is listed on the stock exchange.
“We want to be No. 1 in the next five years. We want to be in every strata of the market. We’re now in the high end, but we want to also be in the mid market and low cost housing,” he said.
Crown Asia’s P222-million IPO will mark the bourse’s first listing this year, overtaking the anticipated P7.7-billion IPO of Company of Friends Inc. (ProFriends) and the P32-billion follow on offering of nickel miner Global Ferronickel Holdings Inc.
The offering of 158 million primary common shares—priced at P1.41 each—will run from April 10 to 17, which will later be listed at the PSE Main Board on April 27. Crown Asia is seen to have a market capitalization of P889.42 million, with an estimated 25.048 percent public ownership post-IPO.
Net proceeds of P203.98 million after listing-related charges and taxes will be used immediately after listing for the construction of its PPR and HDPE manufacturing plants and warehouse as well as purchase of equipment (P66.2 million); partial retirement of its P68.8-million loan with Security Bank Corp. (P43.8 million); modernization of its existing compounds and pipes plants (P25 million); and working capital purposes (P68.98 million).
Abacus Capital & Investment Corp. is the issue manager, arranger and underwriter of the maiden offer.
Crown Asia is a plastic compound producer based in Guiguinto, Bulacan, which manufactures and sells plastic compounds and synthetic resins for making construction materials such as tubes and pipes.
The Villanueva and Perez families own the company. They will later own a combined 74.95 percent stake in Crown Asia after the IPO.