Monday March 12, 2007
Pharmaceuticals to replace fertilisers as big revenue earner
CHEMICAL Company of Malaysia Bhd (CCM) is targeting its pharmaceutical business to be the biggest revenue earner this year, replacing its traditional core fertiliser business.
The group is poised to be the country's largest pharmaceutical player by year-end with subsidiaries CCM Pharmaceuticals Sdn Bhd and CCM Duopharma Biotech Bhd each securing about 25% of the total domestic market. CCM group, a unit of Permodalan Nasional Bhd is principally involved in the fertiliser, industrial chemical and pharmaceutical businesses.
Group managing director Dr Mohamad Hashim Ahmad Tajudin told StarBiz that the growth in the pharmaceutical business this year would be supported by the improvement in regional economies and the Government's focus on healthcare and health tourism under the Ninth Malaysia Plan.
?Our new RM60mil pharmaceutical plant in Bangi, Selangor is set to start operations by year-end. This will double our production to meet increasing market demand in line with the group's growth strategies.
?Volume is the key word in the pharmaceutical business and the name of the game is to produce at the lowest cost possible,? he said.
Hashim said CCM would be looking at strengthening and expanding the overseas markets for its pharmaceutical products this year.
?Our main targets will be Asean, the Middle East and the Organisation of Islamic Conference countries,? he said.
CCM currently exports to over 20 countries worldwide.
According to Hashim, Asean was an important market given its 500 million population, which offered strong growth potential for CCM.
Dr Mohamed Hsahim Ahmad Tajudin
Reflecting the significance of its Asean market, the group has representative offices in Indonesia, Vietnam and Singapore.
?We plan to set up new representative offices in Thailand and the Philippines before year-end,? Hashim said.
Within the next five years, Hashim expects export sales to contribute about 40% of the annual turnover of the group's pharmaceuticals business. Sales to Muslim countries represented about 20% of total export turnover, Hashim said.
Despite the growing focus on exports, he said demand for pharmaceuticals and other healthcare products in Malaysia was expected to rise in tandem with sustained economic growth and as Malaysians became more health-conscious.
The healthcare industry in Malaysia is currently estimated at about RM2bil and expected to grow steadily by 6% to 8% annually.
Hashim said CCM Pharmaceuticals was the largest local manufacturer of generic drugs with over 280 products including antihistamines, antibiotics and expectorants.
It is also the leading over-the-counter products manufacturer in Malaysia with vitamins and health supplements under brands such as Champs, Proviton and Uphamol.
Apart from meeting the stringent Good Manufacturing Practice (GMP) standards of the Health Ministry, CCM Pharmaceuticals also meets the PIC/S requirement, which is widely recognised in Europe as well as the Australia Code of GMP for medical products allowing CCM products to be sold in the country.
Hashim said CCM Pharmaceuticals' JAKIM halal certification was also internationally recognised particularly in the Muslim countries.
?We believe the halal certification has led our exports to Muslim nations like Indonesia and the Middle East to surge 53% last year,? he added.
On the group's fertiliser and chemical businesses, Hashim said the fertiliser market in Malaysia had reached maturity with the growth rate moderating about 3% annually while the chemicals business would be subjected to cyclical movements in world chemical prices.
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