Kimia Farma Injects Rp846 Billion, Danantara Reveals the Root of the Problem

JAKARTA - Danantara Indonesia has injected capital worth IDR 846 billion to PT Kimia Farma Tbk (KAEF) as a rescue step for the financial performance pressure experienced by the red pharmaceutical company.

The capital injection was given to improve the financial structure and stop the cycle of declining performance which was considered risky to destroy the company's business.

Danantara's Chief Operating Officer (COO), Dony Oskaria, revealed that Kimia Farma's main problem lies in the low utilization of the factory, even though the company has a large production capacity. This condition has a direct impact on the contribution margin which is actually negative.

"In terms of revenue, it is quite high, but in terms of net income they are not able to. Because of the utilization of the factory, the factory is made a lot, but the utilization is low," said Dony in Jakarta, written Thursday, January 29.

Dony said that the limitation of working capital also exacerbated the condition. As a result, Kimia Farma was forced to reduce the product portfolio by reducing the stock keeping unit (SKU), which in turn weakened the company's competitiveness.

"The working capital is less, as a result, the SKU has started to be cut," he said.

Not only operational issues, Kimia Farma is also said to have made a wrong investment move by partnering with foreign investors. Instead of strengthening capital, the cooperation ended in a legal dispute.

"Now the investors feel cheated, because it turns out that the book presented at that time was not true. Now they demand that we return the money. There is a lawsuit in arbitration," said Dony.

Another problem arises from the regulatory side. According to Dony, foreign investors who enter the Kimia Farma pharmacy business face licensing constraints, because ownership of pharmacies is not allowed for foreign parties. As a result, a number of permits cannot be extended and force the company to restructure.

"Pharmacies should not be owned by foreigners. What is the result? Once it is due, the permit cannot be extended. Whether you want it or not, this will become a problem, we must restructure," he explained.

Dony emphasized that Danantara decided to inject capital to stop the practice of cutting SKU which was considered dangerous for the sustainability of Kimia Farma's business.

"I said he shouldn't cut his SKU anymore. Why? The deeper the cut, the more he gets into a self-destruction cycle. His company will die if it is cut and cut, so we made a final equity injection to Kimia Farma last year, so that they can enter into a healthy profile," he said.

For information, based on the financial statements for the third quarter of 2025, Kimia Farma still recorded a loss of IDR 179.73 billion. Even so, this figure shrank 57.93 percent compared to the same period last year of IDR 421.83 billion.

Amid this pressure, Kimia Farma actually recorded a net profit of IDR 99.14 billion. However, the company's sales were still contracted by 10.88 percent to IDR 70 trillion, reflecting the major challenges that management still has to face in the future.