Meiji sees RI as a potential destination for relocation
Meiji sees RI as a potential destination for relocation
The Jakarta Post, Jakarta
Drug producer PT Meiji Indonesia recently marked its 30th year in
Indonesia. The company has been a pioneer in producing
antibiotics since 1974. In 2001-2002, Meiji Indonesia was among
13 pharmaceutical companies that expanded their businesses here
when it invested some US$10 million to expand its facility in
Pasuruan, East Java. Meiji president director Akihito Yoshioka
talks with The Jakarta Post and Bisnis Indonesia on the company's
performance. Here is the excerpt:
Question: How has your company managed to survive for 30 years?
Answer:We stick to our principle of producing high quality
products. To do so, we provide training for our employees and pay
attention to their welfare.
Q: How do you see the pharmaceutical market in Indonesia? Is it
still attractive given the low government budget for health and
low purchasing power of the people?
With a population of 220 million, the (domestic) drug market is
(still) quite small with a value of $1.5 billion a year. Compared
to Brazil with a population of 166 million, the pharmaceutical
market reaches $7 billion a year, almost six times higher.
This is because many Indonesians do not receive proper medical
services. Most Indonesians also prefer non-medical treatment such
as going to a local healer or taking traditional medicine.
Our company previously participated in a government program to
distribute medicine nationwide. But we were cut out of the
program when the government appointed PT Indofarma and PT Kimia
Farma to produce medicine for the program. Since then, we had to
seek a different market.
Q: How do you see the Indonesian pharmaceutical industry ahead of
the Asean Free Trade Agreement (AFTA)
The prices of drugs are much lower in countries such as Thailand.
It will be difficult for Indonesia because cheaper drugs from
outside will be coming in. So, pharmaceutical companies must
prepared, for example, by reducing production costs.
Q:What about Meiji's preparation to face AFTA
The prices of Meiji's products are quite high because of their
quality. We often send (manufacturing) equipment for validation
and calibration to Japan, Germany and England to maintain
(product) quality.
To facilitate the production process, we need to replace this
equipment. This entails a lot of expenditure. Most Indonesian
companies do not do this.
But Meiji Indonesia has been exchanging several products with
Meiji's unit in Thailand. So we are ready.
Q:Target export for this year?
Last year our export reached $10 million or roughly 10 percent
of Indonesia's total pharmaceutical export value of $100 million.
We expect to export just about the same amount this year because
our main market for Betalactam and Penicillin which is Japan, has
become saturated.
Other markets such as Vietnam, Laos and Cambodia seek lower
quality and lower-priced drugs.
Q:What are your future Investment plans in Indonesia?
Every year, we invest up to $2 million to improve our facilities.
In 2001, we invested $11 million. This year we don't have plans
for expansion because the market is still small. To survive, we
have to export most of our products.
But we produce new products every year. We are now producing
96 items. Some 55 percent goes for export, the remainder is for
the domestic market.
Q:So what is the company's commitment to investing in Indonesia?
This is an important factory for Meiji Group. Meiji Group in
Japan plans to relocate their factories outside Japan because of
the high production cost. Indonesian and Thailand are among the
options.
In the past, Meiji Group had six factories in Japan but we
closed three of them.
We think that labor costs in Indonesia are still low. But the
problem is low productivity. So, we need more training and
education to increase productivity.
We also prefer to have fewer employees because if we have too
many employees, they tend to be less productive. At present, we
employ 421 people as factory workers, marketing staff and
administrative staff.