Business Development Asia LLC

South East Asian Health News

ISSUE 7, JUNE 1998

INDONESIA

The Association of Pharmaceutical Companies announced that 40%-60% of Indonesia's pharmaceutical companies are threatened by bankruptcy. The increased cost of importing raw materials has made it difficult for companies to trade normally. The Government has given import subsidies for raw materials worth US$70m and L/C guarantees worth US$58m to state owned companies in the sector. (June 8^th 1998)

First Pacific's proposed US$25m rights issue for the listed Indonesian company Darya-Varia Laboratories could be delayed up to a month as a result of the recent upheaval in the country. Much of Darya-Varia's inventory was destroyed in the recent rioting. Darya-Varia has not reported any estimates of the extent of the damage. The proceeds of the rights issue will be used to help reduce the company's US dollar denominated debt. (June 3^rd 1998)

The Government is lowering the prices of various generic drugs by 10%. Drug prices increased last July after the economic crisis hit. This latest reduction is the third phase of the Government's subsequent campaign to supply affordable drugs. (June 2^nd 1998)

KPJ Healthcare Bhd, a subsidiary of the Malaysian conglomerate Kumpulan Perubatan, is confident that its two Indonesian hospitals will continue to operate despite economic instability in the region. Medika Anda, in Jakarta, reported revenues of RM2.4m (US$650,000) and Selasih, in Padang, reported revenues of RM1.1m (US$300,000) for 1997. KPJ is the first healthcare company to be listed on the main board of the Kuala Lumpur Stock Exchange. (May 29^th 1998)

The Ministry of Health has announced its plan to reduce the number of drugs on the local market to help healthcare providers prioritize their patient care. The Ministry plans to produce a national essential drug list to help consumers understand which drugs they need to use. Since the majority of diseases in Indonesia are tropical, the Ministry is focusing on drugs to treat those diseases. (May 6^th 1998)