Chinese Investors Eye Indonesia`s Pharmaceutical Sector

Four Chinese pharmaceutical firms have expressed their intent to invest in Indonesia as conveyed to the Chairman of Indonesia Investment Coordinating Board (BKPM) during his visit to three Chinese cities: Qingdao, Hangzhou and Shanghai.

Franky said that Chinese investment will enhance domestic pharmaceutical industry because 96 percent of raw materials in the pharmaceutical industry are still imported. “The time is right, because the government has just revised the negative investment list,” Franky said in a written statement yesterday, June 19, 2016.

The revision has made pharmaceutical sector 100 percent open to foreign investment, he said. “Because President Joko Widodo hopes that, by 2019, the need for pharmaceutical raw materials can be met domestically by 50 percent.”

China is one of Indonesia’s main sources of investment. Chinese investment realization has reached US$2.6 billion since 2010. BKPM has recorded investment commitment worth US$5.3 billion from China since 2010.

In the first quarter this year, Chinese investment realization reached US$464 million with 339 projects. Their investment has absorbed 10,167 workers. It has put China in the fourth place of the list of countries with the most investment in Indonesia behind Singapore, Japan, and Hong Kong.

Pharmaceutical industry players have welcomed the plan to invest from China. However, they have called on the government to direct the investment to primary industries, such as chemical producers. “We need domestic raw materials, so we will not import it. We have been acting like a tailor, all raw materials are from abroad,” said Yasser Arafat, Corporate Secretary of PT Indofarma (Persero) Tbk