Indonesia's top drugmaker, Kalbe Farma, said it now sees sales growth this year at 7%, revising down from an 11% aim even as it plans regional expansion as a sharp drop in the currency hits the bottom line.
The company said annual revenues are now expected to clock in at 19 trillion rupiah ($1.42 billion), according to the Kontan newspaper cited by Reuters. Indonesia's currency, the rupiah, now trades above 13,300 to the dollar, down more than 15% from levels around 11,500 at the end of 2014.
In May, Kalbe said it was looking to expand to Singapore and Thailand and their over-the-counter drug markets as a regional trade pact looks set to start at the end of the year.
The regional push is of interest ahead of an economic union on the Association of Southeast Asian Nations (ASEAN) at the end of 2015 that holds the promise of gradual harmonization on regulatory approvals in the trade bloc and related moves to protect intellectual property.
Kalbe has already expanded into Myanmar, the Philippines and Vietnam, but they account for only 5% of overall sales.
Reuters, citing analysts, said the downward revision reflects rupiah weakness and lower consumer purchasing power expected over the next two years. A rate hike by the U.S. Federal Reserve widely expected this year is also expected to see a flow of dollars out of the country accelerate to pay debt borrowed in greenbacks.
Earlier this year, growth hopes based on Indonesia's ambitious national healthcare plan launched in 2014 were also knocked down for companies like Kalbe because of more expensive raw materials they must import from China, India and elsewhere as the currency weakened. The industry relies on imports for 95% of those products.
- here's the story from Reuters