The industrial region of Subang, assisted by the Investment Coordinating Board (BKPM), is developing a new area for pharmacy industry. The project began in 2021 with an investment worth IDR 3.16 trillion.
Subang regency in West Java province was an area of approximately 2,051.76 square kilometers and a population of 1,595,320 in 2020. Its capital has the same name.
Meanwhile, BKPM is a government institution that deals with investment projects and responsible for implementing policy and coordinating investment projects in Indonesia. The board was established in 1973. Investment Minister Bahlil Lahadalia has chaired the BKPM since 2021.
Offering lots of opportunities
The pharmacy industry project is situated around three villages of Wantilan, Sawangan and Kosar in Cipeundeuy district, Subang regency. The project occupies an area of 2,717 hectares (ha) and focuses on its first phase construction of an area of around 400 ha. The area is strategically located on the Rebana metropolitan development in West Java, covering six regencies of Sumedang, Majalengka, Cirebon, Subang, Indramayu and Kuningan as well as Cirebon city.
The new expansion will focus on the development in pharmacy industry, notably with raw materials for paracetamol, clopidogrel and amoxicillin medicines. However, there is still room for other sectors to be developed such as automotive, high-precision, consumer goods and IT & Center.
Five companies are ready to expand in Subang industrial zone or Subang smartpolitan industrial area. The company such as PT Suryacipta Swadaya (SSIA) is pushing for development in the zone. While the rest of the companies come from China. The zone is attractive to investors to come and develop the regency. The area is known to use the smartness and sustainability concept with the significant use of the Internet of Things (IoT).
Dewi Binawati, Head of Sales & Tenant Relations of PT Suryacipta Swadaya, told industry.co.id during an interview on March 29, 2022, that: “They [Chinese companies] are engaged in automotive component industry sector, especially EVs.”
Various business from China, Japan and South Korea have requested to visit the location. Their main focuses are automotive industry sector, warehouses, food & beverages, pharmacy and health equipment.
Subang has a strategic location in the manufacturing corridor of Bekasi-Karawang-Purwakarta and West Java’s new center of economy the Rebana metropolitan. While its surroundings consist of National Strategic Project (PSN) which is the Cikopo-Palimanan toll road and Patimban port. In 2022, Suryacipta’s parent company SSIA (PT Surya Semesta Internusa Tbk) allocated funds for the project of about IDR 500 billion to acquire land. Two years earlier, SSIA received funds from International Finance Corporation (IFC) about US$100 million which was allocated primarily for the project.
Risk to pharmaceutical industry
The domestic pharmacy industry is experiencing a heavy burden on raw materials this past year which resulted in high prices.
Honesti Basyir, President Director of state-owned pharmacy company PT Bio Farma, told a session with the House of Representatives (DPR) on October 5, 2020, that during the COVID-19 pandemic, pharmacy industry did not always make profit. The reason behind it was the cost of raw materials was three to five times higher than the original price. The expense of raw materials from abroad caused an increase in the domestic prices of medicines.
About 90% of the pharmacy materials were imported. During the pandemic, all countries tried to purchase these raw materials, said Binawati. Meanwhile, the raw materials prices were controlled by China and India. Due to the low supply, the export limit on raw medicine materials and the ongoing pandemic, the price of raw materials soared higher than usual.
