Thailand’s MEGA in JV with Sydna Farma to set up pharma unit in Indonesia

Thailand-based pharmaceutical firm Mega Lifesciences Ltd (MEGA)  plans to set up a production plant in Indonesia with Sydna Farma. MEGA inked a partnership with the Indonesian Sydna Farma last week for the same.

The Thai company will hold over 50 per cent in the venture, according to MEGA’s chief executive officer Vivek Dhawan. The firm has earmarked an initial investment of $1 million by early 2017. “As planned, we will take around two years to study the market and do the research and development on our products and set up the plant right after that,” he said.

Indonesia’s pharmaceutical market is estimated to be around $6.24 billion, taking one-fourth of the total healthcare market at $23 billion. “Indonesia is the largest pharmaceutical market in ASEAN with a strong growth rate of 12.5 per cent per annum. This joint venture will strengthen our presence in this region and drive our growth significantly,” he said.

MEGA recorded revenues of 7.77 billion baht and net profit of 547.88 million baht in 2014. It hopes the net profit will grow 10 per cent this year riding on  factors such as baht depreciation, lower production cost and the launch of supplementary products. Over 70 per cent of its revenue comes from export and the rest from domestic market, which remained largely unaffected by the slowdown.

The company hopes to double its revenue and profit in the next five years, following its aggressive expansion in ASEAN and Africa regions. “We see a great potential in Myanmar and in Africa as they still lack of good quality food and medicine. Therefore, the proportion of our revenue from these countries should increase from 10 per cent currently to 20 per cent soon,” he added.

Each year the company has allocated the budget of $1-2 million for doing research and development on products to boost its market share and profit margin.