Indofarma to stay in the red this year: CEO<\/p>\n
Rendi A. Witular
\nThe Jakarta Post
\nJakarta<\/p>\n
State-owned pharmaceutical company PT Indofarma said on
\nTuesday that it will remain in the red this year as it strives to
\nrestructure its business and sales strategy, which are considered
\nuncompetitive.<\/p>\n
\"We are trying to revise our business and sales strategy this
\nyear. The sales policy applied by the previous management has
\nsimply caused our products to be uncompetitive,\" Indofarma newly-
\nelected president Dani Partomo said on the sidelines of a hearing
\nwith House of Representatives Commission V for industry and
\ntrade.<\/p>\n
Dani said that the production cost of Indofarma's drugs was
\nstill high compared with similar types of drugs produced by other
\ncompanies.<\/p>\n
The publicly listed company forecast that this year it would
\nbook a loss of Rp 12 billion (US$1.4 million), down from a loss
\nof Rp 59.8 billion the previous year.<\/p>\n
For the first semester of this year the company managed to
\nreduce its losses to Rp 37.4 billion.<\/p>\n
In order to overcome its cash flow problems, the company plans
\nto issue three-year medium term notes worth Rp 150 billion for
\nrefinancing most of its debts, worth Rp 215 billion.<\/p>\n
The company said that with the new debt issue, it expected to
\nsave around Rp 8 billion per year in interest payments?<\/p>\n
Dani said that the note issuance was scheduled to take place
\nlater in the fourth quarter of this year.<\/p>\n
Indofarma, led by its previous management, was under scrutiny
\nby the Jakarta Stock Exchange earlier this year for financial
\nreport irregularities.<\/p>\n
The company reported to the bourse a net loss for financial
\nyear 2002, whereas previously it had reported a net profit of Rp
\n88.6 billion in the first three quarters of 2002.<\/p>\n
The company said that mistakes in inventory during the first
\nthree quarters, and costly programs, such as giving massive
\ndiscounts to pharmacies in the fourth quarter, had contributed to
\nmore than Rp 108.6 billion in discrepancies.<\/p>\n
However, many analysts raised questions over the
\ndiscrepancies, saying that mistakes were caused by sloppiness.<\/p>\n
Due to the mistakes, the government took tough action by
\nreplacing the company's management.<\/p>\n
Indofarma is about 19 percent owned by the public and 81
\npercent by the government.<\/p>\n
The company is among several state-owned firms scheduled to be
\nsold to strategic investors.<\/p>",
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