Merck spends Rp 37b to boost capacity

Evi Mariani, The Jakarta Post, Jakarta

PT Merck Indonesia announced a plan to boost its production capacity by upgrading its machinery and renovating its plants, laboratories, office buildings and storehouses this year.

"We estimate the investment for the upgrading and the renovation to reach Rp 37 billion (about US$4.1 million) by the end of this year," said Jens Rohne, the finance director of the publicly listed chemical and pharmaceutical company.

Actually, the company started the renovation in 2001, but it is carrying out the major overhaul this year, according to plant director Elly M. Asali.

As for the machinery, "We are upgrading it gradually. But the Rp 37 million budget has covered the purchase of some larger- capacity machines," she said on Tuesday after a press conference at Merck premises in East Jakarta.

However, the company saw its 2002 sales and net profit declining.

In its 2002 report, the company booked about Rp 221 billion in sales and Rp 37.5 billion in net profit, down from Rp 224 billion and Rp 56.4 billion respectively in 2001.

Koesdianto Setyabudhi said in the conference that the decline was caused mostly by the decrease in the sales value of Merck's over-the-counter (OTC) drugs. He did not mention the precise figure.

In a phone interview with The Jakarta Post, a research analyst for Bank Negara Indonesia (BNI) Securities, Fitri Murniawati, said that according to a report from a market surveyor, 2002 was a healthy year for the pharmaceutical industry.

"The report stated that in 2002 the pharmaceutical market grew by 23.6 percent from the previous year," said Fitri. "Especially for the market of OTC drugs, it grew by 25.1 percent."

"I think the decline in Merck's sales was mostly due to its lack of market efforts in winning last year's thriving OTC drug market, especially that of multivitamins," she said.

Merck itself is targeting an increase in its sales by more than 25 percent from 2002.