TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Pharmaceutical holding company delayed until October, awaiting Jokowi’s approval

After the establishment of a pharmaceutical holding company was delayed in June, the State-Owned Enterprises (SOE) Ministry has announced that it hopes the plan can be realized before the end of this year

Riska Rahman (The Jakarta Post)
Jakarta
Fri, September 20, 2019

Share This Article

Change Size

Pharmaceutical holding company delayed until October, awaiting Jokowi’s approval

A

span>After the establishment of a pharmaceutical holding company was delayed in June, the State-Owned Enterprises (SOE) Ministry has announced that it hopes the plan can be realized before the end of this year.

Undersecretary for industrial, agricultural and pharmaceutical affairs Wahyu Kuncoro said in Jakarta on Wednesday that he hoped the pharmaceutical holding company could be officially established by October.

Honesti Basyir, the newly appointed president director of state-owned vaccine producer PT Bio Farma, said preparations for the holding company had reached 95 percent. However, the SOE Ministry could not officially establish the holding company just yet as it was waiting for President Joko "Jokowi" Widodo to sign a government regulation on the establishment of the holding company.

"We can establish the holding company immediately after the President signs it,” Honesti said after Kimia Farma’s extraordinary general shareholders meeting in Jakarta, adding that Bio Farma had been appointed to lead the holding company.

The holding company will comprise Bio Farma, which will be assigned as the parent company, Kimia Farma and Indofarma, both of which will be Bio Farma subsidiaries. After the company is formally established, the group will become the leader in the country’s pharmaceutical market.

Currently, the government holds a 90.02 percent stake in Kimia Farma and 80.66 percent of Indofarma.

However, the government’s stake in Kimia Farma may decrease in the near future as the company plans to issue 1.58 billion new shares next year to increase public ownership. Wahyu said the government might not exercise its right in the rights issue.

“We may not exercise our right because state capital injection into Kimia Farma is not included in this year’s state budget or in 2020’s state budget,” he said, adding that government ownership would decline to 70 percent from about 90 percent.

Kimia Farma’s newly appointed president director, Verdi Budidarmo, said the firm could potentially raise up to Rp 3 trillion (US$213.14 million) from the rights issue, which would be conducted in September 2020.

Meanwhile, Honesti said that each of the holding company’s subsidiaries would be focused on running their own business specialty.

“Bio Farma will still focus on producing vaccines, while Kimia Farma will focus on being a complete healthcare chain from producing raw materials for drugs to running hospitals, and Indofarma will focus on producing herbal medicines and medical devices,” he said.

In line with its duty in the upcoming pharmaceutical holding company, Verdi said the firm was in the process of acquiring a hospital to expand the firm’s healthcare business. However, he declined to go into detail about the hospital.

In addition, he said, the company was also in talks on partnering up with a South Korean cosmetics firm in expanding its cosmetics line. “The partnership could be in the form of a joint venture or joint operations,” he said, adding that the firm was trying to grab a piece of the pie in the country’s rapidly growing cosmetics business.

Publicly listed Indofarma recently underwent organizational restructuring by establishing two new strategic business units, finance director Herry Triyatno said.

“We established a natural extract unit and a medical device unit in August so that we can focus on developing these businesses,” he said during a press briefing in Jakarta, adding that the two new units would add to the existing pharmaceutical units that had been the firm’s core business for years.

Indofarma president director Arief Pramuhanto further explained that through its natural extract business unit, the company would focus on developing herbal medicines and later expand its business to producing food and beverage products as well.

As for its medical devices unit, Arief said, the company would also manufacture diagnostic medical devices in the future. He also added that the company aimed to have its own medical devices manufacturing complex by 2022 at the latest.

Arief said Indofarma projected each of its two new business unit would give a contribution of 20 percent in 2020, while the rest would be come from its pharmaceutical unit. “But we expect the medical devices unit’s contribution to increase and eventually have the same number as the pharmaceutical unit in the future,” he said.

{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.