An Executive Country Review: South East Asia An ... - EC Reviews

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Between Rocks and Hard Places: The Southeast Asian Pharmaceutical Industry at a Juncture Across the region, many pharmaceutical companies have emerged over the past 50 years. Often springing from Chinese family businesses, the spectacular socioeconomic growth witnessed by the region has fostered a buoyant industry with hundreds of players. While some have barely taken off from the traditional medicine, remedies, and herbal tea activities, others have developed into large integrated groups, with distribution and logistics operations, fully fledged manufacturing capabilities, and in-house marketing activities. Despite the fundamental flaw of having only marginal API production in the region (unlike the compelling examples of fully vertically integrated China and India), the Southeast Asian pharmaceutical industry is a credible player that deserves to be kept in mind. Beyond market sizes, in themselves compelling enough, a wealth of entrepreneurial value, great industrial tools, cumulated know-how and expertise, and of course local knowledge is on display. The region is also at a genuine turning point of its development, and the industry is forward thinking and ready for action. The region’s industry: domination by the largest In the meantime, local players have devel- This report was prepared by Executive Country Reviews. Authors are Gilles Valentin (gilles@ecreviews.com), Emmanuelle Berthemet (emma@ecreviews.com), Marco Parigi (marco@ecreviews.com), Amicie de Bodinat (amicie@ecreviews.com), and Yaz Yazicioglu (yaz@ecreviews.com). oped dominant positions that are hard to fight. In Indonesia, the largest market of the region, three players are leading the pack, each with different strengths. The leader in Indonesia, Kalbe Farma is Southeast Asia’s largest local pharmaceutical company when excluding Chinese and Indian players. With $267-million revenues in 2005, it is trailing the global leaders Pfizer and GlaxoSmithKline, which also hold the top positions in this region with $367 and $289 million revenues, respectively, for 2005 (source: IMS Health). Kalbe Farma is a versatile producer domi- 78 Pharmaceutical Technology SEPTEMBER 2006 www.pharmtech.com
nating the OTC market, the energy drinks, and the nutrition market and is number three in the Indonesian prescription market with a 9% market share. The next Indonesian players are Dexa Medica and Sanbe Farma, both with �$152-million revenues that benefited from truly impressive revenue growth rates of 35% and 28.6%, respectively. These companies are also strong prescription generics producers. Dexa Medica is a producer of solid and liquid forms, particularly injections. The company has expended the range of its offer notably by striking partnership agreements with some of the world’s most renowned pharmaceutical players, producing and distributing their products under license throughout Indonesia. Sanbe Farma, on the other hand, is moving beyond its original core activities of human and veterinary pharmaceutical manufacturing and is financing a biotech and research center as well as managing a brand new, state-ofthe-art private hospital in Bandung. Despite an impressive presence on their home turfs, all three companies have initiated international market expansion strategies starting across the region, in Vietnam, Thailand, and Myanmar as well as Africa, Nigeria in particular. “This densely populated African nation (132 million people) is attractive to Indonesian companies as the two countries share market characteristics, from the fact that most of the population relies on a very low disposable income through to the fact that both markets are volume rather than value based. In terms of innovation, Kalbe Farma, Dexa Medica, and Sanbe Farma are at the edge of the sector. From Sanbe’s state-ofthe-art new CGMP sterile injection plant and new dry forms tablet plant to Kalbe’s Kalbiotech, a Singapore-based entity that will work on research coordination and licensing in Singapore and Dexa’s successful in-licensing and even out-licensing deals, Pharmaceutical Technology SEPTEMBER 2006 79
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An Executive Country Review: South East Asia An ... - EC Reviews

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