The consumer health business, which produces and sells over-the-counter medicine, was Merck’s most profitable business unit. Brands such as the B-complex vitamin Neurobion and anemia medication Sangobion are well known on the market.

Merck’s net sales in 2017 increased by 12.33 percent year-on-year (yoy) to Rp 1.16 trillion (U$82.36 million), while sales in the consumer health business were recorded at Rp 558 billion, or 48 percent of total revenue, but its growth only reached 6.9 percent yoy.

However, Merck must let go of the unit, worth around Rp 1.38 trillion, as Merck KGaA agreed to sell its worldwide consumer health business to United States-based Procter & Gamble (P&G).

“The transaction in Indonesia will be executed by PT Procter & Gamble Home Products Indonesia along with other P&G subsidiaries here and is targeted to be completed in the fourth quarter,” Merck Indonesia Corporate Secretary Melisa Sandrianti said during a public expose on Monday.

Merck Indonesia consumer health business director Holger Guenzel said that the production plant was not included in the transaction. However, Merck would transfer its employees in the consumer health unit to P&G.

“Around 180 employees dedicated to the consumer health business will be transferred to P&G,” he said.

Currently, Merck Indonesia employs 622 people.

Guenzel added that it would be business as usual in Merck’s consumer health business until the transaction was completed. There would be a chance for the company to continue manufacturing products for P&G under a manufacturing supply agreement.

Merck Indonesia president director Martin Feulner said that the Germany headquarters had decided to focus on science and technology.

He acknowledged that the sale of the business unit in Indonesia would affect its sales but when its new business started to gain traction, the company’s revenue level would recover.

“There will be a short tip in revenue but if you move the company into research and development, it will be compensated in a few years or decades,” he said during the same occasion.

He added that the company would focus on its biopharmaceutical business, which produces therapeutic medicines for chronic illness such as cancer, diabetes and multiple sclerosis.

In 2017, sales in its biopharmaceutical business grew by 14 percent yoy to Rp 499 billion, while the market only grew by 5.3 percent. It contributed 43 percent to Merck Indonesia’s total revenue.

Merck biopharmaceutical business director Evie Yulin said that the company would bring skin cancer medicine Bavencio and multiple sclerosis treatment tablet Mavenclad to Indonesia.

“We have received approval from the FDA [food and drug administration] in other countries for both medicines. The process of approval from the Food and Drug Monitoring Agency [BPOM] will take around three to four years,” she said.

Meanwhile Merck Indonesia plant director Arroyo Aritrixso said that the company was seeking a way to export its products to the Middle East. The company exported 43 percent of its production, mainly to Asian countries, while the remaining 57 percent was allocated for the domestic market.

“[Indonesia is home to] the only Merck factory in Southeast Asia. It is possible to increase sales through exports,” he said.

Merck Indonesia began its operations in 1970 and became a publicly listed company in 1981. The factory and headquarters is located in Pasar Rebo, East Jakarta.

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