Indofarma sees sales up 40%
Indofarma sees sales up 40%
Rendi A. Witular, The Jakarta Post, Jakarta
Ailing state-owned pharmaceutical company PT Indofarma said on
Monday that it would be back in the black this year on an
expected 40 percent increase in sales, as it strives to
restructure its business and sales strategy.
Indofarma president Dani Pratomo said sales were projected to
increase to about Rp 700 billion (US$82.3 million) this year from
Rp 498 billion last year, and a profit of around Rp 35 billion
from a loss of Rp 129 billion in 2003.
"We are optimistic that we will make a profit this year
despite tougher competition in the country's already competitive
pharmaceutical industry," said Dani during a press conference.
He explained that the company would increase its sales by
offering discounts on generic medicine of between 5 percent to 50
percent, as it had no other choice than to offer such discounts
due to the competition.
"I expect demand for generic medicine to increase," he said.
About 85 percent of Indofarma's sales still rely on generic
medicine.
Indofarma was under scrutiny by the Jakarta Stock Exchange
(JSX) earlier this month due to the company's poor performance.
The JSX has continued, to this day, the suspension of Indofarma's
shares, pending clarification from the company.
Indofarma recorded a loss of Rp 129 billion last year from Rp
59.8 billion in 2002, after it previously said it would obtain a
profit.
Indofarma financial director Soedibyo said that the loss was
mainly caused by the company's decision to write off Rp 55.8
billion in expired medicine and unsold medical tools belonging to
its subsidiary PT Indofarma Global Medika (IGM).
IGM contributed around 60 percent to Indofarma's total loss.
Soedibyo also said that huge borrowing interests, which amount
in total of Rp 40.9 billion, also worsened the company's
financial burden. Indofarma had around Rp 235 billion in debts
last year owed to Bank Mandiri, Bank Central Asia and Bank
Bukopin.
Due to the bad performance of IGM, Indofarma plans to sell the
company, which engages in the distribution of pharmaceutical
products, food and beverages, in an effort to allow the company
to concentrate on its core business of manufacturing generic
medicine.
"We are continuing to look for strategic investors," Dani
said.
At the moment, publicly listed pharmaceutical firm PT Tempo
Scan Pacific and distribution company PT Tiga Raksa Satria are
the investors which have openly expressed interest in IGM.
The government is also planning to merge Indofarma with a
relatively healthier state-owned pharmaceutical company, PT Kimia
Farma, before being proposed to private investors for sale.