The Synergy of Kilang Internasional Pertamina and Kimia Farma to Strengthen Domestic Pharmacy Independence

Jakarta, December 30, 2020 – PT Pertamina (Persero) through Subholding Refining & Petrochemical PT Kilang Pertamina Internasional (PT KPI) synergizes with PT Kimia Farma Tbk (PT KF) in developing a paracetamol production project from benzene to support pharmaceutical independence in the country.

The collaboration was marked by the signing of the Heads of Agreement (HoA) for the Development of the Paracetamol Production Project from Benzene by the President Director of PT KPI, Ignatius Tallulembang, and the President Director of PT Kimia Farma Tbk, Verdi Budidarmo, witnessed by Deputy Minister of SOE I, Pahala Nugraha Mansury, President Director of PT Pertamina Persero, Nicke Widyawati, and President Director of PT Bio Farma, Honesti Basyir, in Jakarta on Wednesday, December 30, 2020.

Deputy Minister of SOE I, Pahala Nugraha Mansury, welcomed and appreciated Pertamina's breakthrough steps, through PT KPI and PT KF, which plans to build a paracetamol pharmaceutical factory with a capacity of 3800 tons per annum (TPA) as a derivative of petrochemical products, namely benzene.

"Until today, we all know and learn together that amid the current COVID-19 pandemic, health has become the main inseparable capital to restore the national economy," said Pahala.

The Ministry of SOE also appreciates this SOE synergy step because this collaboration can reduce imports of raw materials for drug production and encourage optimization of refinery products.

On the same occasion, President Director of PT Pertamina (Persero), Nicke Widyawati, also revealed that PT KPI and PT KF are collaborating to further process one of the petrochemical products. It includes benzene and propylene from the Refinery Unit (RU) IV Cilacap to obtain developed and produced into Para Amino Phenol (PAF), which will become pharmaceutical raw materials which are paracetamol.

"Through the HoA between PT KPI and PT Kimia Farma, both parties will continue to study the business cooperation scheme based on the previously carried out Joint Study results. The study includes the provision of raw materials, namely benzene; product offtake plan; transaction scheme; and commercial studies," continued Nicke.

Nicke added that this project's initiation is inseparable from the fact that pharmaceutical products are one of the essential needs in ensuring the health of the Indonesian people.

In 2019, the national pharmaceutical industry demand grew to IDR 88.6 trillion. However, 95% of BBO needs are still met with imports.

In the HoA signing event, the President Director of PT Bio Farma (Persero), as the Pharmacy Holding SOE, Honesti Basyir, said that this business synergy could support Indonesia's pharmaceutical ecosystem. "Of course, we appreciate this collaboration, and we hope to strengthen the independence of the national pharmaceutical industry, as well as increase the value chain of petrochemical products produced by Pertamina," said Honesti.

Honesti revealed that his party already has a roadmap to reduce imported raw materials. The holding of Pharmaceuticals SOE has previously attempted to strengthen the health industry ecosystem's value chain with the establishment of the BBO Kimia Farma Sungwun Pharmacopia factory. By cooperating with strategic partners, it is hoped that this business cooperation's efficiency can be realized. Honesti added that this cooperation could be a solution to the problem of product raw material availability.

For information, previously, PT KPI and PT KF had signed a Memorandum of Understanding on "Potential for Cooperation in the Development of Pharmaceutical Raw Material Providers" on July 24, 2020, then signing a Cooperation Agreement (PKS) in September 2020.**

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