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Kimia Farma to set up new subsidiary with Chinese firm
Publicly listed state drug producer PT Kimia Farma will sign a joint venture agreement in April with a Chinese pharmaceutical company to establish a plant producing corticosteroid medicines
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ublicly listed state drug producer PT Kimia Farma will sign a joint venture agreement in April with a Chinese pharmaceutical company to establish a plant producing corticosteroid medicines.
Corticosteroid medicines are used to reduce inflammation in cases like arthritis, allergic reactions, asthma, eczema and gut diseases.
Kimia Farma issued a statement late last week saying the company had established an internal team to set up a new subsidiary with a Chinese company to run the new plant.
The subsidiary is expected to absorb up to US$12 million in investment. There are no details yet on the Chinese counterpart.
Previously president director Syamsul Arifin said that the partners would build the corticosteroid drugs’ factory next year, producing the medicines by 2012.
Corporate secretary Adhi Nugroho said the investment in the new subsidiary would affect the value of dividends paid to shareholders.
“We need support from shareholders to reduce the 2009 dividends from its total net profit, so that it will help Kimia Farma in forming the new subsidiary,” he said.
Adhi did not elaborate how much the publicly shared dividend would be this year, saying that the decision would be taken at the shareholders meeting.
In 2007 Kimia Farma shared 30 percent of net profits with shareholders; however, in 2008 the company only allocated 25 percent.
Kimia Farma netted Rp 2.8 trillion ($308 million) in revenue in 2009, jumping by 12 percent compared to last year. It also enjoyed Rp 63 billion in net profits in 2009, an increase of 14 percent up from Rp 54 billion in 2008.
The company aims to gain Rp 3 trillion in revenue by allocating Rp 60 million in capital expenditure this year. It expects to boost exports of medicine and to increase the price of generic medicines this year.
Kimia Farma is the country largest chain, which has 350 pharmacies equipped with clinics and laboratories, as well as 40 distribution offices throughout the country.
Starting this year the company also plans to expand its dispensary chain through a franchise system, by opening 100 new outlets every year and most of the new outlets will be opened under the proposed franchise system.
Aside from producing branded and essential generic medicines, the company is also authorized to produce narcotic products.
It was reported that the government would merge Kimia Farma with other state pharmaceutical companies, PT Indofarma and PT Biofarma in order to strengthen the state pharmaceutical firm to compete better with private companies.
