JAKARTA (TheInsiderStories) – PT Kimia Farma Tbk (IDX: KAEF) signed a sale and purchase agreement to buy 56.77 percent or 476.90 million shares of PT Phapros Tbk (IDX: PEHA) from PT Rajawali Nusantara Indonesiaon Feb. 13,
In the public announcement on Thursday (02/14), the state-owned pharmaceutical not give more detail on the acquisition values. The acquisition process is expected to be completed in the first quarter of 2019.
The medicine producer said, the purpose of purchasing all of these shares is to increase Kimia Farma‘ pharmaceutical market shares to six percent and enrich the drug production portfolio in Phapros. This transaction also aims to increase the growth of assets, profitability, the efficiency of marketing costs, research and marketing development by utilizing Phapros’ distribution channel.
Since last year, KAEF has planned to acquire a pharmaceutical company and three hospitals. The company has allocated Rp2.2 trillion (US$157.14 million) for the acquisition.
Previously, in February 2018, the company was bought 60 percent shares of Dawaa Medical Ltd. Co. which has a pharmaceutical network in Saudi Arabia with worth Rp139 billion. This action was part of Kimia Farma’ planned to expand the market to the Middle East and Africa.
The CEO Honesty Basyir said, the company will build 90 retail outlets and open a drug factory in Saudi Arabia in two years period. In Indonesia, Kimia Farma aimed to adds production facilities in Banjaran, West Java. The company developed ethical drug factories and herbal medicine factories at Banjaran, which will be completed before the second quarter of 2019.
The total investment for the construction of the plant reaches Rp 1.1 trillion. In Cikarang, Bekasi, KAEF also build the new factory to produce raw materials for medicine, cosmetics and food supplements with total investment Rp132.5 billion.
The factory is operated by PT Kimia Farma Sungwun Pharmacopia, a joint venture between Kimia Farma and Sungwun Pharmacopia Co. Ltd., from South Korea. About 20 percent of the production from the factory will be allocated to domestic needs while 80 percent will be exported.
The construction of a drug raw material factory is also carried out to reduce the company’ dependence on imported raw materials. As is known, about 90 percent of domestic drug raw material needs are still imported. Over the past year, there have been several medicinal raw materials whose prices have risen by more than 40 percent, especially those imported from India.
Meanwhile, this year, Kimia Farma targets a double-digit revenue growth in line with the company’s strategic which is focused on transforming integrated health service retailers from pharmacies, clinics, to diagnostic laboratories.
In addition, the manufacturer focuses on optimizing supply chains or distribution. Major business expansion also continues, including by acquiring a company in the pharmaceutical sector, medical devices, including hospitals.
Kimia Farma posted revenue of Rp5.30 trillion during January to September 2018. That number rose 23.37 percent from the same period last year of Rp 4.30 trillion. KAEF also recorded Rp225.28 billion net profit on third quarter of 2018. This achievement grew 17.36 percent from Rp191.96 billion in the same period last year.
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