INDOFARMA OFFLOADS RAF STAKE

State-owned Indonesian pharmaceutical company Indofarma has sold off its 58% stake in loss-making firm Risima Abadi Farmasi (RAF). The shareholding was acquired by Trimarga Rekatama for IDR5.77bn (US$640,000), resulting in a loss of IDR3bn for Indofarma on its investment of IDR8.66bn. The remaining 42% stake is still held by fellow state-owned concern Kimia Farma.

RAF's annual losses of up to IDR1.5bn have been attributed to stiff international competition for the company's paracetamol product. The proposed privatisation of leading state-owned players such as Indofarma and Kimia Farma, means that underperforming units are unwelcome deterrents to potential investors and the offloading of Indofarma's stake should come as little surprise.