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RI-South Korea Joint Venture Establishes $30 Million Oncology Factory

RI-South Korea joint venture establishes $30 million oncology factory. PT CKD OTTO Pharmaceuticals (CKD OTTO Pharma) has recently established a US$30 million factory to produce cancer treatment pharmaceutical products, better known as oncology products.

President director Baik In Hyun said at the grand opening of the factory on Tuesday that the company had obtained legal distribution permits (NIE) to market its new powder and liquid injection oncology products. CKD OTTO Pharma is a joint venture between Korean pharmaceutical company Chong Kun Dang Pharmaceutical Corp. (CKD) and PT OTTO Pharmaceutical Industries (OTTO), a subsidiary of the Indonesian pharmaceutical MENSA Group. “The products consist of gemcitabine, paclitaxel and oxaliplatin,” Baik said, adding that besides producing the three, the company also produced seven other products – docetaxel, epirubicin, carboplatin, doxorubocin, methotrexatee, pemetrexed and bortezomib.

The company was processing permits for the distribution of the other seven, he added. He said that the company, with a total production capacity of 1.6 million vials per year, was targeting to sell 50 percent of its products on the global market given that the production facilities at the factory met European Good Manufacturing Practice (EU-GMP) requirements and obtained halal certification. “For the global market, we are targeting to export our oncology products to countries in the Middle East, North Africa, Europe and Southeast Asia,” he said. “We are also targeting to control a 30-percent share of the domestic market by 2024.” Baik said that Indonesia, with a population of about 250 million, had a pharmaceutical market worth around US$7.2 billion in 2018, which was expected to increase to around US$11.9 in 2023.

Addressing the opening ceremony, Health Minister Nila Djuwita Anfasa Moeloek said that CKD OTTO Pharma’s new factory in Cikarang, Bekasi, West Java, would help reduce the cost of cancer treatment. “The Healthcare and Social Security Agency (BPJS Kesehatan), for example, recorded that its social security spending for catastrophic diseases last year reached Rp1.2 trillion (US$85 million), of which 20 to 30 percent was spent on cancer treatments,” she said. “Hopefully, the prices of oncology drugs produced by this new factory can be lower than imported products that have shipping costs,” she continued.

However, because of the lack of raw medicinal supplies in Indonesia, CKD OTTO Pharma was still importing raw materials from Korea’s Kyongbo, a subsidiary of CKD, Baik said. Recently, the Institute for Development of Economics and Finance (Indef) reported that Indonesia still relied by 90 percent on imports of medicinal raw materials. The Industry Ministry recorded that Indonesia’s deficit from its international trade in pharmaceutical products increased to US$1.13 billion last year from US$1.1 billion in 2017.

The government has made various efforts, including by improving regulations and offering incentives in the form of duties reductions, to attract investment in the upstream of the pharmaceutical industry. On June 25, for example, the government issued Regulation No. 45/2019 on the calculation of taxed income and expansion of income tax in the current year, under which taxpayers conducting research and development in Indonesia can enjoy a tax deduction of up to 300 percent and those providing internships or educational activities a deduction of up to 200 percent.


“We hope that in the future, foreign investors will be willing to produce not only end products but also intermediate materials in the country,” the head of the Food and Drug Monitoring Agency (BPOM), Penny Lukito, said after delivering her remarks at the grand opening.


At the same occasion, she said that since 2016, eight foreign companies had established factories in Indonesia providing essential drug products including biology, oncology and hormone products. The eight companies were PT B Braun Medical Indonesia, PT Ethica, PT Kalbio, PT Kimia Farma Sungwun, PT YSP Industries Indonesia, PT Lloyd Pharma, PT Amarox, and the latest, CKD OTTO Pharma, she said. Separately, the Health Ministry’s director general for pharmacy and medical equipment, Engko Sosialine Magdalene, told The Jakarta Post that this year, two joint ventures were on their way to being established, namely PT Synthon Pharma and PT Sampharindo Retroviral. “These joint ventures will transfer technology to Indonesia, in accordance with the government’s steps against the country’s dependence on the imports of drugs and medical devices,” she said. RI-South Korea joint venture establishes $30 million oncology factory (syk, The Jakarta Post)

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