MEXICO CITY (Reuters) - Mexican dairy company Lala, which on Tuesday raised over $1 billion in an initial public offering, plans to expand outside of Mexico and Central America and invest in technology and plants to cut costs, its chief financial officer told Reuters.
Lala’s (LALAB.MX) offering was close to 10 times over-subscribed and its shares are up 6.6 percent since their debut on Mexico’s stock exchange on Wednesday.
“Our shareholders have already had a good return up until now,” CFO Antonio Zamora said in an interview on Thursday. “We hope, of course, that success can continue since the funds we’re raising are only going to mean that Lala can accelerate its growth.”
The initial focus will be on investing in big industrial complexes to replace some its smaller plants and lower production, as well as on expansion into existing and new market segments in Mexico, Zamora said.
Lala has just over half Mexico’s market for milk and cream and about one-third of the market for pre-packed cheese, according to AC Nielsen figures cited by the company.
“There are opportunities in this country, that’s the first use for the funds,” said Zamora.
“We will also be looking toward the south,” he added, explaining the company is looking for possible acquisitions in Latin America.
Some of the proceeds from the offering will also be used to pay down bank debt.
The success of Lala’s IPO reflects the company’s solid results and growth potential, as well as a certain amount of buzz about Mexico, Zamora said.
Companies in Mexico have raised more than $10 billion in initial and secondary stock listings year to date, a record figure for Latin America’s second-biggest economy.
Lala’s success - listing during uncertainty over the U.S. government shutdown as well as slowing economic growth in Mexico - could rub off on other companies in Mexico.
The company’s bumper IPO “is good for the market in general,” said Zamora.
Editing by Tim Dobbyn