SINGAPORE – Indonesian coffee chain Kenangan Coffee is considering an initial public offering (IPO) on the Singapore Exchange (SGX) as it looks to go public within the next 24 months, said co-founder and group chief executive Edward Tirtanata.
“We have been speaking quite closely with SGX, and I think they’re doing great things to overhaul the exchange,” he told The Straits Times in an interview on the sidelines of the Forbes Global CEO Conference.
The United States, Hong Kong and Indonesia are also under consideration, while a dual listing remains a possibility.
“In the next 24 months, we do want to go public. We just haven’t decided on the venue.”
Tirtanata said the decision would depend on whether market conditions at a particular exchange were favourable to an ASEAN consumer company at the time.
Hong Kong, for instance, may currently be more receptive to artificial intelligence and biotechnology companies, while consumer businesses are generally well regarded on the Indonesia Stock Exchange (IDX), he noted.
For SGX to be selected, Tirtanata said he would like greater clarity on how companies could pursue dual listings in Singapore and on regional exchanges.
He sees SGX as a potential “nucleus” for dual listings involving exchanges such as IDX, Bursa Malaysia and Hong Kong Exchanges and Clearing, but noted that there is no clear precedent on how this can be done.
“If I want to list on both IDX and SGX, how do I do it?” he said, adding that the group is waiting for clearer guidelines or another company to establish a precedent before making a move.
Tirtanata cited the Nasdaq-SGX Global Listing Board (GLB) as an example of a framework that gives companies clear guidelines on matters including the transferability of shares between exchanges.
However, the valuation threshold of $2 billion to qualify for a GLB listing means that many smaller companies would not make the cut, he said.
Coffee and food and beverage companies are “always the flavour of the month” on the IDX, but a coffee company could also be an interesting addition to SGX, which is seeking to diversify beyond sectors such as real estate investment trusts.
“A coffee company could offer something different for local investors and make it more interesting,” he added.
An IPO would not primarily be used to finance Kenangan Coffee’s expansion though, as its new stores are mostly funded by internal cash flow.
Instead, listing would give the company’s venture-capital shareholders a more liquid market for their holdings and allow them to realise their investments, Tirtanata said.
He added that he is not seeking to exit the business and intends to remain with the company for at least another decade.
Kenangan Coffee has 10 outlets in Singapore, where it opened its first store at Raffles City in 2023.
But while sales at its Singapore outlets are among the highest across the seven markets in which it operates, elevated rents and capital expenditure make rapid expansion here riskier than in Indonesia or Malaysia, where Kenangan Coffee will open about 85 in Malaysia and nearly 390 in Indonesia in 2026.
In contrast, it has no fixed target for Singapore and will expand only when it can secure locations at rents that allow stores to generate an acceptable return.
“One unprofitable store in Singapore can be equivalent to four to five profitable stores” in terms of the impact on earnings, he said.
The group may still open one or two stores in prime locations for branding purposes, but Tirtanata said expanding rapidly in Singapore does not make financial sense.
“Singapore is actually a great market for F&B in terms of the revenue side. But in terms of the cost structure, it does present a challenge, especially with rental,” he said.
The local market is also fiercely competitive, with Chinese coffee giant Luckin Coffee already running 103 outlets here after just three years in Singapore.
Meanwhile, there are plans to expand Starbucks’ coffee offerings after DFI Retail Group acquired control over the coffee chain’s licensed operations in Asia, including in Singapore, on Sept 30.
But Tirtanata said he is less concerned about competition from the growing number of coffee chains in Singapore, as the dense market here generates enough demand to support multiple brands.
Singapore records some of Kenangan Coffee’s highest daily transactions and average spending per customer across its markets.
“I’m not concerned about the revenue side of things,” he reiterated. “I’m a lot more concerned with the cost structure.”
Disciplined site selection is more important than rapid expansion. “Having 100 outlets here would not necessarily help us secure lower rents,” he pointed out.
And in terms of procurement, Singapore benefits from Kenangan’s regional network that allows it to source ingredients and packaging more cheaply across ASEAN.
Shipping goods from Indonesia is inexpensive, Tirtanata explained, adding: “It costs me more to ship my goods to Sulawesi than to Singapore.”
Still, Singapore carries strategic value beyond the profits generated here. For example, its first outlet at Raffles City helped attract partners interested in taking the brand to the Philippines and Taiwan, he said.
“If you make it here, there’s definitely that halo effect for you to open in the Philippines, Malaysia and others.”
