K

imia Farma Sungwun Pharmacopia (KFSP) has started the construction of its first pharmaceutical raw materials factory in Cikarang, West Java, to reduce the country’s dependency on imports of such materials from China and India.

KFSP, a joint venture between state-owned pharmaceutical giant Kimia Farma and South Korea-based Sungwun Pharmacopia, will produce eight types of active pharmaceutical ingredients (API) for medicine after the factory completes its first development stage.

By then, it will be able to produce 30 tons of the eight types of API per year and 23 tons of the production will be exported to several countries, including Japan and the US.

The factory, which is expected to begin operations in 2018, will also produce seven types of high function chemicals per year to be used as raw materials for cosmetics and food supplements. It will have an annual capacity of 150 tons of the high function chemicals, all of which will be exported.

“At present, the country’s pharmaceutical industry uses around 2,200 types of API. We aim to produce 50 percent of them within the next 10 years,” Kimia Farma president director Rusdi Rosman said in his opening remarks during the new factory’s groundbreaking ceremony on Monday.

Kimia Farma has allocated Rp 132 billion (US$10.18 million) of funds for the first stage of development. The factory itself will be around 5,000 square meters in size.

Further expansion will take up at least 6 hectares of land — or half of total areas owned by the company in Cikarang — in the next decade.

In the collaboration, Sungwun Pharmacopia will provide all the facilities needed to produce the API in Indonesia, while Kimia Farma will send some of its representatives to South Korea every year to obtain the necessary skill to produce the API.

“South Korea has mastered the production of dozens of API, but it’s still not enough. We want to form partnerships with other countries, like China and India, in years to come, so that eventually we can be independent in producing our own medicine,” Rusdi said.

Health Minister Nila F. Moeloek also stressed the importance of such matters as she said Indonesia had relied on imports for far too long.

India and China are the two largest suppliers of pharmaceutical raw materials to Indonesia, followed by the US and Europe.

Indonesian manufacturers have imported intermediate substances as well from those countries to produce medicine. Kimia Farma, for instance, allocates 20 percent of its revenue to import such materials annually.

“We can’t repeat the mistakes that we made during the financial crisis [in 1997-1998], when the surge in the US dollar led to a medicine shortage in the country,” Nila said.

“Therefore, Indonesia’s pharmaceutical industry must be strengthened to support its own people in the future.”

The Indonesian Pharmaceutical Association (GP Farmasi) has previously projected that investment in the pharmacy sector can reach Rp 215 trillion by 2025.

The sector itself has potential worth up to Rp 700 trillion, consisting Rp 450 trillion in the domestic market and Rp 250 trillion in exports.

Private-owned Kalbe Farma, the country’s largest pharmaceutical company, is also constructing a bio-pharmacy raw material manufacturing plant in Cikarang, slated to commercially commence operations in 2017 or 2018.