Phapros prepares strategy to tackle impact of rising raw material costs
PT Phapros Tbk has prepared a number of strategies to address the rising price of pharmaceutical raw materials amid the geopolitical situation and the strengthening of the US dollar against the rupiah.
Director of Finance, Risk Management and Human Resources at PT Phapros, Ferdinand Troedu, acknowledged in Semarang on Saturday that the impact is not limited to the pharmaceutical industry but affects nearly all sectors.
“For Phapros, we see the impact is already there and indeed occurring, as the majority of our raw materials are still imported,” he said during a Phapros media gathering themed “Weaving Harmony, Strengthening Collaboration”.
He explained that imported raw materials fall into two categories, direct and indirect, and both are experiencing price increases.
“To overcome this, we are pursuing various methods, one of which is direct renegotiation or reprofiling of raw material suppliers,” he said.
According to him, price renegotiation can be achieved through long-term contract schemes or by increasing contract volumes.
“Secondly, we are also looking for alternative supply sources. So, we seek alternative options to allow for bargaining. Thirdly, we are implementing efficiency in production,” he said.
However, he noted that efficiency does not mean reducing production, but rather focusing on how to reduce costs through a more efficient production process.
Meanwhile, Director of Production at PT Phapros, Ida Rahmi Kurniasih, added that Health Ministry policies also provide room for the pharmaceutical industry to cope with the impact of the current global situation.
“The Ministry of Health has stated that a drug price increase of 10 to 20 percent is still acceptable. This means that is the government’s level of acceptance in responding to geopolitical conflicts and the dollar’s rise. So, we fully support that,” she said.
Furthermore, she said the domestic component level (TKDN) is also being maximised to reduce dependence on imported raw materials, such as salt or NaCl.
“If you want to make Oralit, the NaCl salt used to be imported. Now the government is strengthening TKDN and supporting domestic raw material producers. For Phapros, all products using NaCl have switched to local sources,” she said.
Currently, Phapros is part of the national pharmaceutical industry ecosystem, with 56.7 percent of its shares directly owned by Kimia Farma. This makes the state-owned enterprise the majority shareholder. As a member of the Kimia Farma Group, Phapros is also part of the state-owned pharmaceutical holding company led by Bio Farma.