Korean pharmaceutical companies target Indonesia to establish a bridgehead for Southeast Asia market entry.

Companies have invested in Indonesia by buidling manufacturing plants. The government and associations are also in support.

According to pharmaceutical companies on September 20th, pharmaceutical companies, the government, and organizations are quickly establishing collaborative partnerships with Indonesia.

Recently, public-private representatives, including KPBMA, Ministry of Food and Drug Safety (MFDS), KIMCo, and 15 Korean pharmaceutical and biotech companies, have visited Jakarta, Indonesia, to seek collaborative business opportunities with Indonesian Food and Drug Authority (BPOM) and local companies.

The collaboration between pharmaceutical companies and the government is critical because the industry has shown interest in entering the Indonesian market.

Korean pharmaceuticals are showing intersts due the growth in Indonesia market and government's support for in-house pharmaceutical development.

Indonesia's pharmaceutical and biotech market is expected to grow quickly from KRW 13 trillion in 2022 to KRW 18 trillion in 2026. The analysis suggests that population growth and increased intractable diseases, including cancer and degenerative brain diseases, from an aging society will contribute to such development.

Furthermore, Indonesia is considered a hub for pharmaceutical R&D·production·consumption. It is the biggest pharmaceutical consumption market among the countries in the Association of Southeast Nations (ASEAN).

Additionally, to target the "Halal Belt," which consists of approximately 1.9 billion people worldwide due to population growth in Muslim countries, the Indonesian market is considered as a bridgehead in response to the increasing demand for "Halal certification" for pharmaceuticals.

For these reasons, Korean pharmaceutical companies are currently establishing joint-subsidiaries with local companies, building manufacturing plants, and out-licensing technologies, in addition to exports.

In particular, countries that have already entered the market are experiencing the results.

Korean pharmaceutical companies that have entered the market include Daewoong Pharmaceutical, Chong Kun Dang, GC Biopharma, SK Plasma, HK inno.N, Il Dong Pharmaceutical, and Daewon Pharm.

For Daewoong Pharmaceutical, the stem cell factory in the Cikarang Javabeka Industrial Complex of Daewoong Biologics Indonesia, an Indonesian subsidiary, obtained GMP certification from the Indonesian BPOM and began full-scale operation.

Since establishing a branch in Jakarta in 2005, Daewoong Pharmaceutical has steadily strengthened cooperation, including establishing a joint venture with Infion, Daewoong Infion, in 2012. These efforts are bearing fruit.

Chong Kun Dang established Indonesia's first halal-certified anticancer drug production plant in 2019 after establishing a joint venture, 'CKD-OTTO,' with the Indonesian pharmaceutical company OTTO in 2015.

In addition, the Indonesian joint venture is achieving success by exporting products from Indonesia to Algeria and other countries.

GC Biopharma received final approval for the business license for blood product plant construction and technology transfer from the Indonesian BPOM, on June 1, 2023. The company works with the Indonesian Red Cross and local pharmaceutical company P.T. Triman to supply plasma for blood product processing and plant business. A three-party business agreement has been signed concerning this.

GC Cell, an affiliate of GC Biopharma, has signed a partnership agreement with the Indonesian company 'Kalbe Farma' and entered into a technology transfer and out-licensing agreement for 'Immune Cell LCD', a patient blood-derived immune anti-cancer cell therapy. The launch is aimed for next year.

SK Plasma received approval from the Indonesian BPOM in March last year to build a plasma fractionation plant that can process 1 million liters of raw plasma annually. The company plans to establish a factory in collaboration with the 'Indonesia Investment Authority (INA)' and take charge of factory operations, business rights, production, and sales.

In addition to companies establishing factories, HK inno.N exports K-CAB, Daewon Pharm exports Pelubi CR tab, and Boryung exports Kanarb tab.

The government also continues to provide support. On September 11th, the MFDS dispatched a pharmaceutical entry support team through a public-private partnership.

The MFDS visited Korean pharmaceutical companies operating in Indonesia to discuss the current status and outlook of the Indonesian market, learn about their experience in the local market, and collect information on other difficulties.

The effort to enter the Indonesian market will continue through collaboration among government bodies, such as the MFDS, organizations, and pharmaceutical companies.