Kimia Farma asks for a delay in divestment program

Kimia Farma asks for a delay in divestment program

The Jakarta Post, Jakarta

The management of state-owned pharmaceutical company PT Kimia
Farma said the sale of the government's shareholding in the
company should be delayed for another one to two years.

Company finance director M. Syamsul Arifin said that the delay
was needed to further improve the company's financial condition
so that the value of the shares would be higher.

"As a company included in the list of the government's
divestment program we are ready. But, if we may suggest, the
divestment should be made in another one or two years, when the
company's condition has strengthened," he was quoted by detik.com
as saying over the weekend.

Kimia Farma is one of a number of state-owned enterprises due
to be sold by the government this year in a bid to raise around
Rp 5 trillion in cash to help finance the 2004 state budget
deficit.

The government has a 90 percent stake in Kimia Farma, while
the remaining 10 percent is in the hands of public investors.

Asked about progress on the planned merger, Syamsul said that
it was still being reviewed by a government team, adding that
there was a possibility the company might be merged with another
state-owned firm, PT Indofarma.

He explained that mergers or acquisitions are currently being
entered into by pharmaceutical companies worldwide in a bid to
cut marketing and research costs.

Kimia Farma reported a 30 percent increase in 2003 net profit
to Rp 46.2 billion (US$5.47 million), from Rp 35.4 billion in
2002.

The increase came from an 18.07 percent rise in sales to Rp
1.816 trillion last year, from Rp 1.538 trillion accumulated in
2002.

This year, Kimia Farma projected net profit to double to Rp
93.46 trillion on an expected 5.2 percent increase in sales to
around Rp 1.91 trillion.