Kalbe Farma Sets Aside $41m to Finance Acquisition of a Health-Food Producer

Kalbe Farma, a local pharmaceutical firm, sets aside Rp 500 billion ($41.3 million) to finance its planned acquisition of a health-food producer this year.

The company will fund the acquisition from its own funds.

"The acquisition fund doesn't come from our capital expenditure this year," said Vidjongtius, finance director at Kalbe Farma as quoted by the Investor Daily.

Kalbe has been scouting the market and been in talks with more than 10 companies in Indonesia. The report did not identify the potential acquisition targets.

Unilever Indonesia is one of the listed food companies in the country.

Kalbe Farma said on Wednesday that it has allocated between Rp 1 trillion and Rp 1.2 trillion for capital expenditure this year to boost its production capacity.

The company also aims its sales growth and net income to reach 14 percent and 16 percent, respectively, supported by the development of each division.

"Kalbe plans to introduce three to five products of each division this year," said Irawati Setiady, president director at Kalbe Farma, as quoted by the Investor Daily.

The company will keep on developing its unbranded generic medicines, which it has been producing in Cikarang, West Java, since 2012. It has also completed its oncology production facility in Pulogadung, East Jakarta, on Jan. 23, it said in the press release.

In its fast-food division, Kalbe plans to continue the construction of a production facility for nutritional drinks, which is expected to be completed in mid-2015.

The company seeks to develop into a global brand with a presence in countries such as the Philippines, Vietnam, Myanmar, and Nigeria.

It will expand its sales area and boost its export to 5 percent from below 4 percent previously.

"We usually work together with local companies to help distribution," Kalbe said as quoted by Investor Daily.

The company has built a plant in Nigeria, which focuses on medicine and food production.

The company reported a 17.4 percent increase in revenue to Rp 16.01 trillion last year compared to the year before. Its net income rose 10.8 percent last year from the previous year.

Shares of Kalbe Farma rose 0.7 percent to Rp 1,410 on the Indonesia Stock Exchange on Wednesday.

source: www.thejakartaglobe.com