MANILA - Coconut product manufacturer Axelum Resources Corp is banking on increased demand for coconut-based food and beverages as it prepares for its initial public offering in October.
Axelum chairman Romeo Chan said demand for products like coconut water "exploded" in the last few years as consumers in the US and Europe became aware of the health benefits of the beverage.
Chan said coconut water, which used to be discarded during the production of other coconut products, became one of the company's main growth drivers.
"Then we had this deal with vitacoco, we started packing for them and today it's great, it's almost a billion-dollar industry," Chan said in an exclusive interview with ANC's The Boss.
He added that this was partly responsible for the higher demand for other products like virgin coconut oil, cooking oil derived from coconuts, as well as coconut sugar.
"If you go to a supermarket today in the US you will find so many products with coconut in it."
Axelum is looking to raise P7.7 billion from its IPO, which it will use to expand its operations.
Chan said P1.8 billion will be used to acquire other companies, P580 million will go to expanding Axelum's international and local distribution channels, while P470 million will be used to improve and expand its facilities.
Another P760 million will be used to develop new products like concentrated coconut water, Chan said.
Axelum is also looking into possible expansion into Indonesia and Vietnam.
With client firms like candy-makers Mars, Cadbury and Ferrero Rocher moving manufacturing facilities to cheaper locations in Eastern Europe, Axelum is looking to set up manufacturing facilities in either Poland or Hungary.
Chan also said Axelum also aims to set up manufacturing in Canada and in the US in Oregon or Washington State.
Axelum's IPO will push through despite headwinds in the global economy caused by the US-China trade war, Chan said, because the company's fundamentals remain solid.
"I think we should seize the moment and go public."
He said Axelum has P6 billion in revenues annually.