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Kalbe Farma to build factory in Myanmar
Indonesia’s largest pharmaceutical company, PT Kalbe Farma, aims to boost exports with the development of a new factory in Myanmar that will kick off this year
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ndonesia’s largest pharmaceutical company, PT Kalbe Farma, aims to boost exports with the development of a new factory in Myanmar that will kick off this year.
With the operation of the Myanmar factory, Kalbe Farma projected that revenue from exports would increase to 10 percent of total revenue in the next few years, from the current 5 to 6 percent.
“We have prepared capital expenditure of between US$15 million and $20 million for our Myanmar plant,” Kalbe Farma president director Vidjongtius said on Tuesday after an annual general shareholders meeting in East Jakarta.
The company saw a big opportunity to expand its market share in Myanmar, considering that Mixagrip — its over-the-counter (OTC) drug for flu and headaches — was well-received by local customers and became a market leader in the country.
With the factory, which would specialize in producing Mixagrip, Kalbe Farma is seeking to expand its market presence in not only Myanmar, but also other ASEAN countries as well as Africa.
The factory’s construction is expected to take less than two years, with operations projected to start in 2020.
To boost exports, Kalbe Farma will also send larger volumes of its products to the Middle East, Taiwan, Australia and several African countries.
“Each country has different characteristics, but we mostly export nutritional [supplements] and consumer health products,” Bernadus Karmin Winata, Kalbe Farma director and corporate secretary, told reporters during the same occasion.
The strategy to enlarge exports was also due to the recent depreciation of the rupiah, which has impacted the company’s business performance.
Combined with weak consumption, Kalbe Farma posted disappointing first quarter figures this year.
This has become a challenge for the publicly listed pharmaceutical firm, as most of its raw materials are imported.
In the first three months of 2018, consolidated net sales only grew by 2.4 percent to Rp 5.02 trillion (US$362 million), while net income slightly went up by 0.2 percent to Rp 589 billion.
Despite its lackluster growth and the many challenges that lay ahead, the company was confident that it would be able to reach its targeted net sales growth of at least at 7 percent in 2018.
In total, Kalbe Farma has allocated Rp 1.2 trillion in capital expenditure this year, the same amount as in 2017.
On Tuesday, Kalbe Farma announced that it would distribute Rp 1.17 trillion in dividends. This is equal to Rp 25 per share, or equivalent to a dividend payout ratio of 48.75 percent.
This dividend payout ratio was higher than last year’s 45 percent.
