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S pharmaceutical giant Merck Sharp and Dohme (MSD) has opened a second factory in Pandaan in Pasuruan, East Java, to boost its production for the Indonesian and Asian markets.

“The crises in Europe have not affected the Asian market significantly, especially in Indonesia, where purchasing power and medicine consumption continue to increase,” MSD president for Asia Pacific Patrick Bergstedt said in Pandaan on Tuesday.

MSD’s new factory, which has an estimated price tag of US$21 million, was built on 4,900 square meters and lies about 50 kilometers southeast of Surabaya, the provincial capital.

It produces packaging for various medicines used to treat diabetes, hypertension, infections and cardiovascular and respiratory problems.

The new plant supplements the firm’s existing factory in the area, built in 1975 on a 3,350 square meter plot for $6 million.

MSD’s senior vice president for operations, John Markels, said that the company considered Pandaan a strategic location to reach the Asian market.

“Now that we have the new factory, we will be able to meet the growing demands for medicine from the international market,” he added.

MSD exports about 75 percent of the products manufactured at its Pandaan site and markets the remaining 25 percent in Indonesia.

Meanwhile, according to data from the Health Ministry, there are currently 208 pharmaceutical companies operating in Indonesia, including 33 foreign firms.

According to the Health Ministry,’s director general of pharmacy and medical equipment services, Maura Linda Sitanggang, the country’s pharmacy market grows between 12 percent and 14 percent every year.

“There are also increases in the overall population and in the number of elderly. This has contributed to the surge in medicine consumption,” she said.

The planned implementation of a National Social Security System (SJSN) in 2014 would boost pharmaceutical consumption as well, she added.

Under the SJSN, health insurance will be made available to all eligible Indonesians.

Last month, Coordinating People’s Welfare Minister Agung Laksono said that the program would be implemented in stages and would require that a monthly premium of Rp 22,201 ($2.33) be paid for participants.

With the amount approved, Agung said the government would allocate a total of Rp 25.68 trillion to pay for the premiums of the 96.4 million people considered eligible for the program.

The US-based MSD, not to be confused with Germany-based Merck Group, produces among other things, the product line of foot care Dr. Scholl’s, the allergy medicine Claritin and the laxative MiraLAX, all of which are popular in the US.