Hard work ahead for Indofarma board

Evi Mariani, The Jakarta Post, Jakarta

Five new directors were given their assignment on Monday: Stop the financial bleeding at state-owned pharmaceutical company Indofarma.

The company's shareholders agreed in their annual meeting to appoint M. Dani Pratomo, former president director of another state-owned pharmaceutical company Phapros, as its president director. They also appointed Sudibyo P. as financial director, M. Naguib as marketing director, Yuliarti R. Merati as production director and Anung B. Mahatma as human resources director.

According to its 2002 audited report, Indofarma booked Rp 59.82 billion in net losses, reportedly due to mistakes in inventory and expensive marketing programs.

In 2001, Indofarma reported Rp 122.54 billion in net profit.

One of the strategies to reverse Indofarma's condition, Dani said, was improving the company's product portfolio.

"I will push the sales of Indofarma's over-the-counter (OTC) and prescription medicines, which have higher profit margins," he said.

The company depends greatly on its sales of 80 percent of its generic drugs and 20 percent on non-generic ones such as OTC and branded prescription medicines. The generic drugs generate a lower profit for pharmaceutical companies like Indofarma, Kimia Farma and Phapros.

A pharmaceutical industry analyst at BNI Securities, Fitri Murniawati, praised Dani's plans.

"I think Indofarma has potential in OTC products," she said. "The ideal proportion for Indofarma's product portfolio is 60 percent for generic and 40 percent for the non-generic drugs."

Responding to a plan from the government to merge Indofarma with state-owned Kimia Farma or Phapros, she said the plan would be good for both Indofarma and the pharmaceutical industry.