The region's industry: domination by the largest
In the meantime, local players have developed 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 dominating 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-of-the-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-of-the-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, these leaders have adapted spectacularly well to the new conditions of production expected from any decent player today. Although the country does not request CGMP for product registration, the Indonesian manufacturers have anticipated the call and have started investing ahead of time. Sanbe pharma's two splendid new production units are ready to welcome inspections from any national drug regulatory body and take orders for export sales and contract manufacturing. The quality of the construction, equipment used, and procedures in place testify of the head start some players of the region have taken.