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Indofarma to build new factory to boost production

State-owned pharmaceutical firm PT Indofarma (INAF) will build a new factory in the first half of this year to boost production capacity

Tassia Sipahutar (The Jakarta Post)
Jakarta
Sat, March 9, 2013

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Indofarma to build new factory to boost production

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tate-owned pharmaceutical firm PT Indofarma (INAF) will build a new factory in the first half of this year to boost production capacity.

The new factory will be located in the publicly listed company’s production complex in Cibitung, West Java. It will consist of several facilities, including beta-lactam and non-beta-lactam facilities, according to Indofarma accounting manager Dewi Fitrianti.

Beta-lactam antibiotics are medications used to treat bacterial infections. The new establishment, which will start operating in the first half of 2014, is expected to increase Indofarma production capacity by threefold.

The company currently operates one factory only, which annually produces around 2.3 billion non-beta-lactam tablets, 258 million non-beta-lactam capsules, 419 million beta-lactam tablets, 75 million beta-lactam capsules and other products.

Dewi said that construction of the new factory would cost a total of Rp 200 billion (US$20.64 million), with some of the construction funds provided through bank loans from state-owned Bank Mandiri and the rest from
internal cash.

Besides a new factory, Indofarma will renovate its herbal products unit, expand its children’s medical equipment business and improve its research and development unit. “Our children’s medical equipment business is still quite small. Meanwhile, better R&D [research and development] will hopefully enable us to accelerate new product development,” she added.

To finance its expansion projects, Indofarma will sell debt papers, either medium-term notes or bonds, in the second half of the year. It aims at generating between Rp 100 billion and Rp 200 billion from the sale. The total capital expenditure funds figure for 2013 is set at Rp 145 billion.

According to Indofarma president director Djakfarudin Junus, the company is looking to record at least a 25 percent increase in total sales to Rp 1.44 trillion by year-end. “We will improve our distribution lines to ensure longer product availability, enhance our products quality and optimize our drugs market in 2013,” he said during a telephone interview.

The company recently published its 2012 financial report, which showed a slight 4 percent fall in total sales to Rp 1.16 trillion from a year before. Dewi said the decline was a result of Indofarma’s new policy to focus its sales on high-margin products and reduce those of low-margin ones.

In line with lower sales, costs of goods sold also declined, falling 17.4 percent to Rp 159.82 billion. In the end, Indofarma’s net profits surged to Rp 42.38 billion, 14.8 percent higher than 2011.

As of December 2012, Indofarma’s total assets amounted to Rp 1.19 trillion. Its liabilities and equities stood at Rp 538.52 billion and Rp 650.1 billion, respectively. Its shares closed at Rp 335 apiece on Friday, down 1.5 percent from Thursday.

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