Hard work ahead for Indofarma board

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.