Jakarta. Global Chemindo Megatrading, a subsidiary of the pharmaceutical giant Kalbe Farma, announced Tuesday that it had struck a deal to construct a pharma ingredient factory in partnership with China’s Lian SGP.

Lian SGP is a subsidiary of Livzon Pharmaceutical Group. The deal’s initial investment is worth around Rp 650 billion (approximately $39.9 million). Both companies will establish a joint venture called Livzon Pharma Indonesia. The factory will produce active pharmaceutical ingredients (APIs) and other pharmaceutical raw materials meant for both export and domestic needs. The announcement came not long after waves of concerns over expensive drugs in Indonesia caused by the country’s overreliance on pharma ingredient import.

Stanley Handiono Angkasa, the president director of Global Chemindo Megatrading, said that the partnership would help enhance the company’s competence in producing APIs.

“In the long term, this API plant will help reduce our country’s import reliance and bolster the Indonesian health resilience,” Stanley was quoted as saying on Tuesday. 

Aside from boosting Indonesia’s exports, the partnership will possibly enable the transfer of technologies and thus a boon for the country’s research and development.

Livzon Pharmaceutical Group’s chief executive officer Tang Yanggang said that this joint venture marked a “significant step” in the company’s strategy to expand its footprint in the Southeast Asian region. 

“By combining Livzon’s technology and Kalbe’s market knowledge, we believe that we can produce high-quality pharmaceutical products that can contribute to the health sector of Indonesia and the surrounding area,” Yanggang said.