GlaxoSmithKline ($GSK) is making a deeper commitment to consumer healthcare sales in Indonesia but is selling off a manufacturing plant there to do that.
The U.K.-based drugmaker said Friday it had paid about £24.6 million ($40 million) to Sarasvati Venture Capital for the 30% share of its consumer health unit there that it did not own. But as part of a two-pronged deal, it is selling its Insto brand eye drops, as well as a manufacturing plant in Bogor that makes them, for a combined total of £7 million ($11.7 million).
The eye drop brand has already been sold to Pharma Healthcare, while a related entity, PT Pharma Healthcare, will take control of the plant next year, GSK said. The company said that the Insto brand is only sold in Indonesia and that it will sell the same formulation in other emerging markets under the Eye Mo brand. A GSK spokesperson said in an email that the company has about 50 employees at the plant connected to the Insto brand but was uncertain how many will be affected by the sale.
GSK has been making a big commitment to emerging markets. On Monday it said it would spend about $166.5 million on as many as 5 new facilities focused on secondary manufacturing in Africa in partnership with interested governments. It also sees a big upside in selling consumer health products in emerging markets. Last year it spent about $900 million to get a 72.5% stake in its publicly traded consumer health subsidiary in India. The India unit had about $500 million in sales in 2011, compared with only about £50 million ($83.4 million) in Indonesia last year, but GSK sees big potential in the Southeast Asian country.
The Indonesian pharmaceutical market is expected to double in value by 2018 as the government begins implementing national health coverage. Other drugmakers like Pfizer ($PFE) have been expanding there. The U.S.-based Pfizer said last month it would spend about $4 million to expand a plant it has in Pasar Rebo, East Jakarta.
- here's the announcement