Govt to merge Indofarma with Kimia Farma

Govt to merge Indofarma with Kimia Farma

The Jakarta Post, Jakarta

The government said it would push ahead with plans to merge
ailing state pharmaceutical company PT Indofarma with the
healthier PT Kimia Farma and follow up with selling the shares in
the combined entity.

State Minister of State Enterprises Laksamana Sukardi said on
Thursday that the divestment was expected to take place this
year.

"The merger plan is still on. It will boost efficiency --
there's no need to have so many pharmaceutical companies that
compete with each other," Laksamana was quoted by Bloomberg as
saying.

The government controls 81 percent of Indofarma, the largest
generic drug producer, and 90 percent of Kimia Farma.

The shares sale is part of this year's privatization program,
which aims to raise about Rp 24.4 trillion to help finance the
budget deficit.

Indofarma expects to enjoy a profit of around Rp 35 billion
this year after suffering a hefty loss of Rp 129 billion in 2003,
while it expects sales to grow by 40 percent to about Rp 700
billion, despite the tough competition.

An Indofarma executive said it would increase sales by
offering 5 to 50 percent discounts on generic medicines.

Reports have said that a number of private firms like
drugmaker PT Tempo Scan Pacific and distribution company PT Tiga
Raksa Satria are also eying Indofarma.