Merck spends Rp 37b to boost capacity

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.