Mitsides Public Company Ltd. (formerly Chr. & C. Mitsides Ltd.), the island’s leading flour and pasta manufacturer, distributor and exporter, plans to offer 1.808.304 shares in a forthcoming initial public offering (IPO) in order to raise CYP 1.5 mln (EUR 2.6 mln) to finance ambitious modernisation and expansion plans both in Cyprus and abroad.
The company announced that it has received permission from the Securities and Exchange Commission to offer the new shares of CYP 0.60 (EUR 1) nominal value at the price of CYP 0.85 or EUR 1.4655 per share.
The IPO, to be held on March 19-22 is the first by a company seeking to go public this year with a listing on the CSE expected sometime in April.
Dinos Mitsides, CEO, said that the public offering will help the company to further improve its operations at home, which in turn will reduce costs and boost profits, and at the same time use some of the proceeds to expand its presence abroad.
Mitsides said the company, which implements the corporate governance code, intends to list in the CSE Parallel Market with a view to move to the Main Market. It will also be following a steady dividend policy.
Before the issue, the total number of shares amounted to 6.391.696 while after the issue the total will amount to 8.2 mln, lifting the total value of the company to CYP 6.97 mln (EUR 12 mln).
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Future plans and prospects
The company’s future plans concentrate both on the increase of exports but, most importantly, on the international expansion of its operations, mainly in neighbouring countries, through strategic alliances and joint ventures with local manufacturers. The recent acquisition of a large share in a Serbian company is a step in this direction, said Marios Demetriades, the company’s Executive Finance director.
This strategic move enforces the company as it expands its market and at the same time helps improve its performance in various areas through enhanced know-how, advanced production facilities and methods, and through more thorough market research.
The company’s prospects are seen as most healthy and promising and its expansion plans most feasible, as the company already enjoys high levels of recognition both domestically and overseas and is well under way in achieving its future goals.
The company also owns four grain silos of a total capacity of 10,000 tons, at its own grounds in Dhali. Some of the proceeds of the IPO will be used for the construction of another four silos, boosting production further while at the same saving the company from paying the government some CYP 250.000 in annual rental of public silos.
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Established name
Mitsides was established in 1932 and deals with the production and sale of products and by-products of flour milling, the trading of grains, the production and sale of pasta products, pasta sauces, tomato products and other foodstuffs, as well as the sale of raw materials for the baking and confectionery industries.
It has long dominated the
The Group consists of Mitsides Public Company Ltd, which since 2001 owns Larnaca Flourmills Zenon Ltd, after the 100% takeover of Zenon’s holding company Blue Azul Investments Ltd. In addition, Mitsides PCL and Blue Azul Investments hold a joint 45,57% shareholding stake of Serbian company Zitopromet Bratstvo A.D.
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The company owns two flourmills, one in
The Mitsides pasta factory was built in 1989 in the Dhali Industrial Zone, using the latest technology to produce a wide range of 40 high quality pasta items. It comprises three independent production lines for long pasta, short pasta and nests, as well as six packaging lines. It also comprises a separate production line for fresh / frozen pasta. The production capacity of the pasta plant is at 1500 kgs/hour or 4,500 metric tons a year, when in full operation.
Based on 2005 audited results, own capital amounted to CYP 8.8 mln (EUR 15.1 mln). Turnover in 2005 amounted to CYP 11.3 mln (EUR 19.4 mln) of which 65% were generated from the flour division, 25% from pasta and 10% from other activities. Net profit amounted to CYP 1.99 mln (EUR 3.42 mln). During the first half of 2006, net profit amounted to CYP 375,021 (EUR 645,000).
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Strategic agreements and expansion
In 1997, Mitsides signed an agreement with Puratos N.V., the world leader in raw materials for confectioneries, bakeries and other food industries, for the exclusive distribution of Puratos products in
Mitsides also enjoys a close cooperation with Yum! Brands Inc, listed on the NYSE, owner of the franchise rights for the KFC, Taco Bell and Pizza Hut restaurants around the world.
Following a two-year procedure which included quality controls and safety and hygiene compliance tests, Mitsides was approved in 1997 by Yum! Brands Inc to become an internationally approved supplier of flour for the Pizza Hut chain. The company has since started exports of substantial quantities of flour to nearly all Pizza Hut restaurants in the Middle East and
In 2006, Mitsides reached an agreement with Rummo SpA of
As part of its strategic plans for the expansion of its operations abroad, Mitsides completed the acquisition of a 45,57% stake in Serbian company Zitopromet Bratstvo A.D. in December 2005. Zitopromet is based in Sremska Mitrovica and deals with the production of flour, pasta and bakery products, as well as the trading of grains. The company already owns a fresh pasta plant, two flour mills of a total capacity of 230 metric tons per day, a bakery plant and seven bakery sales outlets.
In June 2005, Zitopromet started the construction of a new, modern dry pasta plant, of a total capacity of 2,000 kg/hour, at its headquarters in Sremska Mitrovica. The first phase, which involves an automatic short-pasta line of a 1,000 kg/hour capacity, is already in operation, while the second and final phase, involving an automated long-pasta line of an equal capacity, is to be completed within 2007.
