T

he country'€™s largest pharmaceutical company Kalbe Farma (KLBF) is looking to start the production and sale of cancer drugs in the third quarter of this year in a move that should help reduce imports.

Kalbe finance director and corporate secretary Vidjongtius said that the cancer drugs would be in injectable form and would initially be marketed in Indonesia.

'€œWe are going to phase out our imports of cancer drugs once production begins in the third quarter,'€ he told reporters on Friday.

The cancer drugs will be produced at its Rp 250-billion (US$21.15 million) factory in Pulogadung, East Jakarta. The factory has a production capacity of 3 to 5 million units per year, but only 20 to 30 percent of the capacity will be used in the first year.

Vidjongtius said Kalbe would produce three types of injectable drug in the third quarter and another two types in the fourth quarter.

'€œThey are part of chemotherapy treatment and will be able to be used to treat most cancers,'€ he added.

As of now, the imported cancer drugs, part of Kalbe'€™s prescribed drugs division, make up only a small portion of its business. It expects cancer drugs to contribute significantly to its business within the next five years with an annual average growth of 20 to 25 percent.

The company hopes later to export them to Southeast Asian countries as well, especially when the ASEAN Economic Community framework is implemented in 2015.

According to Vidjongtius, publicly listed Kalbe is also preparing to sell its Diabetasol milk and Fitbar energy bar in the Philippines in the coming months to grab a wider market and complement its existing sales of Extra Joss in the country.

Kalbe currently exports a few of its products to ASEAN countries, namely Woods'€™ cough syrup to Malaysia and Singapore, Zee milk to Myanmar and Hydro Coco coconut water to Vietnam.

Kalbe is upbeat that it will reap better results next year, after reducing its business growth target for this year, supported by higher production capacity '€” provided by new factories '€” and the expected wider coverage of the national health insurance (JKN) program.

Among the new factories that Kalbe is looking to operate is a powdered-milk factory in Cikampek, Karawang, West Java.

As for the JKN, Kalbe is optimistic that the government-run program will cover a higher number of Indonesians and thus boost the usage of Kalbe'€™s drugs. '€œAbout 12 percent of our prescribed drug sales were made in the JKN program. We hope to see the figure grow continuously over the years,'€ he said.

According to Kalbe'€™s latest financial results, the company booked Rp 2.13 trillion in total prescribed-drug sales in the first half, meaning the JKN program contributed around Rp 255 billion.

As previously reported, Kalbe has decided to reduce its 2014 business growth target to 11 to 13 percent, down from the initial target of 14 to 16 percent.

The revision was mainly triggered by a slower growth of sales booked in the first half, especially from sales generated by non-Kalbe products.

Kalbe'€™s share price remained unchanged at Rp 1,630 on Friday.

The company, which has a Rp 76-trillion market capitalization, has seen its stocks surge 30.4 percent so far this year, outperforming the broader Jakarta Composite Index'€™s (JCI) 18.2 percent gain.