JAKARTA (TheInsiderStories) - The pharmaceutical industry demands incentives to attract investors to build factories of raw materials and reduce Indonesia’s dependency on imported raw materials, which currently stands at 95% of total raw material needs.
“The government has issued a policy on foreign ownership in the upstream pharmaceutical companies up to 100% from the previous maximum of 85%. But it is not enough as investment in this sector requires huge capital, time for return of investment, and strategic value to eliminate the dependence on imported raw materials, ” said Chairman Pharma Materials Management Club (PMMC) Kendrariadi Suhanda at a press conference exhibition CPhI South East Asia in Jakarta, Thursday (16/3).
Ken, who is also deputy secretary general of GP Pharmaceutical, said the relaxation of foreign ownership in the upstream pharmaceutical sector is beginning to attract investors to build factories to produce pharmaceutical raw materials . However, the industry requires other incentives such as tax allowances, tax holidays and other tax privileges to attract such investment.
In addition, the government should also help the industry through developing supporting infrastructure, he said.
“If you want to build self-sufficiency of raw materials, the government must really commit. That’s what China and India have done when starting to develop their pharmaceutical raw materials industry. Now, they own 90% of the world pharmaceutical market of raw materials,” he explained.
Ken pointed out that the Chinese government even provides incentives of up to 20% return on capital so that investors can sell their products to foreign countries. The incentives are gradually reduced until the company find the market.
General Manager Quintiles IMS Indonesia Wiwy Saso added, the government should also encourage the development of pharmaceutical raw materials industry. Although the market is large, the needs of pharmaceutical raw materials Indonesia are yet to be met by the factories economic scale.
Wiwy said of the total pharmaceutical market in Indonesia of around US$ 5 billion, 30% is the meeting the needs of pharmaceutical raw materials. Of that number, 95% of the raw materials are still imported because there is no domestic supply.
Meanwhile, General Manager of UBM Exhibition Niaga Indonesia Ivan Ferrari said it will invite about 50 potential investors in the exhibition CPhI South East Asia 2017 22-24 March 2017 at the JI Expo Kemayoran, Jakarta. In the exhibition, they will be reunited at the investor forum to explore investment potential of the pharmaceutical industry in Indonesia.
Ivan said, CPhI 2017 is a combination of five exhibition pharmacy, the CPhI for raw materials (ingredients), P-MEC (machinery and equipment technology), InnoPack (product packaging), ICSE (contract industry / toll manufacturing), and HI South East Asia (nutrasetikal, functional food and supplements). CPhI 2017 brings together more than 200 exhibitors. (HS)