Pharmaniaga to focus on Indonesia

PETALING JAYA: Pharmaniaga Bhd expects its business in Indonesia to be profitable this year with an anticipated 1-2% growth in terms of contribution to its overall revenue.
“Our presence in Indonesia is quite big. We own a distribution and logistics company which is public listed (PT Millenium Pharmacon Tbk), in which we own 55% of equity, and also PT Errita Pharma which has a manufacturing plant. Indonesia is going to be the target market for us to grow our export business,” its managing director Datuk Farshila Emran told reporters after its AGM and EGM yesterday.
The group recently upped its stake in PT Errita Pharma to the maximum of 85% via its wholly-owned subsidiary Pharmaniaga International Incorporation Sdn Bhd from 75% previously. The group’s business in Indonesia contributed 23% to overall revenue last year.
Farshila said it is in the midst of upgrading certain facilities within the PT Errita Pharma plant. It is also registering its Malaysia-manufactured products to be exported into Indonesia.
“In Indonesia currently, we have got common products manufactured there and we got high-end generic products in Malaysia, like cardiovascular products, that we can easily export,” she said, adding that the export of products to Indonesia will take some time to materialise due to the product registration process.
Besides Indonesia, the group plans to expand its presence in the European Union (EU) and is ensuring that its plants are certified according to EU requirements.
Pharmaniaga’s plant in Puchong, which produces small volume injectibles, is already EU-certified. It expects its first batch of products to reach the EU market in 2018.
On its joint venture agreement with Modern Healthcare Solutions Co Ltd which has lapsed, Farshila said it is not feasible to continue pursuing its plans to operate a pharmaceutical manufacturing plant in the Middle East.
“Since we have increased our equity in PT Errita Pharma from 75% to 85%, we have decided to really focus on Indonesia because the market is bigger. At the moment, temporarily, we are shelving all Middle East projects,” she said.
However, it will continue to pursue exports to the Middle East, as well as Vietnam and Myanmar.
“We are focusing on expanding our business overseas. With the decline in the ringgit in the last six to seven months, we are quite hopeful that we can penetrate not only regional markets but markets beyond. We are also hopeful that we can expand on our halal products. All our five plants are certified halal. We are also expanding further the number of products being produced and offered to the market under the halal brand,” said its chairman Tan Sri Lodin Wok Kamaruddin.
Pharmaniaga’s capital expenditure for 2016 is close to RM70 million, of which RM40 million will be spent on its manufacturing facilities including RM10 million for its Indonesian operations.
The remaining RM30 million will be used to improve logistics, information system, infrastructure and warehouse facilities.