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5 Jan 2016

Kalbe Farma and Kimia Farma to open raw materials plants in Indonesia

Indonesia is poised to become a production base for overseas and local manufacturers of medicines.

Vidjongtius, director of Indonesia's largest pharmaceutical company, Kalbe Farma, stated that raw material import is a big challenge for the local pharmacy industry. As a response, he declared, Kalbe Farma is currently constructing a biopharmacy raw material manufacturing plant in Cikarang, West Java, scheduled to commercially commence operations in late 2017 or 2018.

State-controlled pharmaceutical company Kimia Farma also announced recently that it would start constructing a Rp 100 billion raw materials plant in Cikarang, West Java, in 2016.

Meanwhile, in a bid to encourage the industry, the Investment Coordinating Board (BKPM) gauged a plan to allow foreign investors to hold more shares in pharmacy companies, from currently a maximum of 85%, to 100%.

Indonesia is indeed poised to become a production base for overseas and local manufacturers of medicines, including toll manufacturing.

Tailored to suit this fast changing industry, the 5th edition of CPHI South East Asia taking place during 6-8 April 2016 in Jakarta provides the must-attend trade exhibition where the regional pharma industry meets to leverage connections, knowledge and insight to spur business.

In December last year, Coordinating Economic Minister Darmin Nasution declared that the government was "not smart" if it did not support the growth of the pharmacy industry.

However, Maybank analyst Janni Asman commented that the removal of industry protection is likely to tighten the competition and lead to capped pricing power of local producers, "Most listed local pharmaceuticals are relatively less efficient than major generic producers in India and China," Janni wrote in her research.

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