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Technology Transfer | Joint Ventures
Kimia Farma Apotek | Mr Imam Fathorrahman
Mr Imam Fathorrahman

Demand for our industry’s services is set to rise in line with the implementation of a universal social security programme, which is expected to create the need for 25,000 primary care clinics throughout Indonesia that cannot be met by BPJS alone

Mr Imam Fathorrahman, President Director

Established in 2003 as a subsidiary of PT. Kimia Farma (Persero) Tbk, Kimia Farma Apotek is Indonesia’s leading national pharmacy chain and health service provider. Can you please present a brief overview of your company’s background to our readers as well as elaborate upon your main strategies for the future?

Kimia Farma Apotek is a subsidiary of Indonesia’s biggest state-owned pharmaceutical company, PT. Kimia Farma Persero Tbk, which has operations in manufacturing, wholesale and retail. Our holding company has a long history, dating back to 1817 as a company owned by the Dutch government. This entity was later nationalised by the Indonesian government in 1971, and in 2003 founded its services arm, Kimia Farma Apotek which oversees business units ranging from pharmacy retail outlets, primary care clinics and diagnostic labs.

We have focused on building upon our market leading position by expanding our network of facilities across the country; our company currently has over 540 pharmacies and it is our goal to reach 600 outlets by the end of this year. When we first entered the market, we had only 70 outlets and have thus already achieved rapid growth over the course of the last decade. Going forward, we expect to surpass a total of 1,000 outlets nationwide for our pharmacies, clinics and labs by 2018.

Our company is in particular prioritising the development of more primary care clinics in line with a decision made in 2011 to evolve from a retail pharmacy chain into a provider of ‘one-stop’ healthcare services. We took this course of action in anticipation of Indonesia’s plan to implement universal social security coverage under BPJS. To ensure that we cement our status as Indonesia’s ‘Most Reputable Healthcare Brand’; the development of clinics also involves raising the quality of our services. We already implement Good Pharmacy Practice in line with WHO standards and are focused on attaining accreditation from the Indonesian Medical Association for our clinics.

Based on your experience in the sector, what can you tell us about your outlook for the pharmacy and healthcare industries in Indonesia?

Demand for our industry’s services is set to rise in line with the aforementioned implementation of a universal social security programme, which is expected to create the need for 25,000 primary care clinics throughout Indonesia that cannot be met by BPJS alone. As a state-owned company we have sought to support this programme to ensure its success by fostering partnerships with BPJS and by expanding our own network. Given this context of new opportunities to further the reach of our services, we have a positive outlook for the industry going forward.

Our outlook is also shaped by the emergence of a growing middle class, which should lead to growth in Indonesia’s pharmacy market as a result of changes in consumer behaviour towards becoming more health-conscious and more aware of preventative measures to avoid illness. It is now increasingly common for people to pursue self-medication through wellness products that are now affordable for a larger subset of the population following a jump in purchasing power.

Which parts of Indonesia have you identified as key target locations for your retail operations?

We are focused on developing our retail presence in Java but have plans to establish a much more widespread retail coverage. Our company currently has outlets in 160 regencies/cities and has set the target of increasing this number to 522 in the immediate future. In the long run it is our goal to make Kimia Farma Apotek services available in every major city in Indonesia.

From an international point of view, Kimia Farma Apotek has already initiated joint ventures in Malaysia. What else can you tell us about your international objectives and what type of cooperation are you most interested in?

The upcoming ASEAN Economic Community will create very big opportunities for us to expand throughout Southeast Asia. We have already received numerous enquiries from entities in Asia and Europe related to new opportunities in the region, but we are currently focused on serving the vast Indonesian market as a means of taking advantage of its huge potential. It is our priority to first strengthen our position locally before moving on to other openings abroad.

When we do decide to move into international markets, our company has already identified Turkey as a potential country to enter as the gateway to Europe from Asia. There are already G2G programmes in place between Turkey and Indonesia, and this could facilitate partnerships and cooperation between businesses from these countries.

How does your company plan to pursue innovation and introduce new products and services in the future?

As part of our corporate evolution into a one-stop healthcare solutions provider, we have primarily worked towards making available a comprehensive array of healthcare services. To provide services tailored to different customer needs, we plan to create an extensive database detailing each individual customer’s healthcare history. Through informatics we expect to better anticipate new trends in healthcare services and wellness products. The foremost challenge in introducing new innovations in our industry continues to be the lack of technology to effectively monitor health and interpret data from our customers.

How is Kimia Farma Apotek positioned towards cooperation with international companies and foreign partners?

Taking into consideration our aggressive expansion strategy, we see opportunities to work with investors from around the world to form partnerships in developing infrastructure to expedite our growing presence across the archipelago as well as for technology to provide high quality healthcare services at a low cost. This includes information technology to address our previously explained challenge of building an effective customer database. Motivating our desire for rapid growth is a tentative plan to go public in 2017, but before proceeding further with this we would need to put in place better infrastructure and increase efficiency.

What would you like our readers at Global Business Guide Indonesia to remember about your company?

It is my vision for Kimia Farma Apotek to become synonymous with high-quality healthcare in Indonesia, dedicated to advancing the industry through new technology. Upon conducting our IPO in the coming years, we expect to see investors joining us not only to expand our business locally but also on the regional and global stage because healthcare is a primary basic need shared by all.

Global Business Guide Indonesia - 2015

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