Kalbe Farma to Ramp Up Capex by 20% This Year to Build New Factories


JUNE 05, 2017

Jakarta. Kalbe Farma, Indonesia's largest pharmaceutical company, is planning to boost capital expenditure by 20 percent this year, with a large chunk of it being used to build new factories.

Kalbe has set aside Rp 1.2 trillion ($90.3 million) in capital expenditure this year compared to last year's Rp 1 trillion. At least 80 percent of this year's capex will go towards the constructing of new factories: one in Pulo Gadung, East Jakarta, and another in Cikarang, West Java. The remainder of the capex will be allocated to the company's distribution business division.

Kalbe makes various pharmaceutical products, ranging from prescription drugs, to nutritional products. It also has distribution and logistics units.

"We are using internal cash to fund our capex and we have spent Rp 200 billion from the capex as of March," newly appointed Kalbe Farma president director Vidjongtius told reporters on the sidelines of the company's annual general shareholder meeting on Monday (05/06).

Kalbe's factory in Pulo Gadung will manufacture intravenous drugs, while the factory in Cikarang will produce generic drugs.

"We are expecting these factories to start operating by 2020," Vidjongtius said.

Kalbe is also developing a $30 million biosimilars factory in Cikarang that will produce its first biotech-based drugs to help reduce the company's dependency on imports.

The company plans to increase the proportion of its production destined for export to 10 percent from 5 percent currently.

"We are exporting Extra Joss [energy drinks] and Diabetasol [milk for diabetic patients] to the Philippines. Other products, such as Procold [cough medicine] we will market to other countries in Southeast Asia – perhaps Vietnam and Myanmar," Vidjongtius said.

Kalbe also aims to expand into the eastern part of Indonesia by building new warehouses and establishing another representative office, possibly in Halmahera, North Maluku, or Sorong, Papua.

The company currently operates 72 office branches in 52 cities in Indonesia.

Kalbe also seeks to expand to the Middle East, especially Dubai in the United Arab Emirates, to market its Hydro Coco product, a coconut-flavored packaged beverage.

"We just established a new representative office in Dubai this year to make it easier for us to get into the Middle Eastern market," Vidjongtius said.

The company also will add at least 12 new products this year, with 10 of them generic drug, two prescription drugs and the remainder packaged energy drinks.

Vidjongtius was appointed as president director during Monday's general shareholder meeting. The full list of Kalbe Farma directors is as follows:

President director (new): Vidjongtius

Director: Ongkie Tedjasurja

Director: Bujung Nugroho

Director: Djonny Hartono Tjahyadi

Director (new): Sie Djohan

Independent director (new): Bernadus Karmin Winata