Heaptalk, Jakarta — The Ministry of State-Owned Enterprises (SOEs) focuses on revitalizing its subsidiaries, including Indofarma (NAF), which is currently under investigation for corruption. Minister Erick Thohir sees the need to improve Indofarma’s business model.
“For subsidiary revitalization, we’re following up, and as for corruption cases, we are impartial. We will investigate and take action against anyone involved in fraud or deceit,” Erick said at a press conference at the Ministry of SOEs in Central Jakarta (11/01).
Initially, the Ministry created a roadmap to position Indofarma as a state-owned company specializing in herbal medicine. This decision was driven by Indonesia’s heavy reliance on imported medicine and raw materials, which currently account for 80%. Erick voiced, “We see that our herbal medicines have potential that can rival those of India and China, where globally, herbal medicines are now becoming a sustainable health solution.”
Applying a mutual control approach
However, he added that these roadmap goals cannot be achieved unless the company practices good corporate governance, which includes transparency, accountability, responsibility, independence, and fairness. For this reason, Indofarma is now focusing on strengthening its management and business practices.
The Bio Farma’s subsidiary is currently exploring partnerships with potential private sector partners to ensure a stable supply of raw materials, which are crucial for its operations. The ongoing tender process means Erick could not disclose specific suppliers. Once production is underway, the Ministry targets that Indofarma will be able to export 50% of its production.
This revitalization of the business model is expected to bring about positive changes at Indofarma, involving checks and balances, controlled raw material supply, and securing domestic and international markets. “As with checks and balances, this mutual control approach is a powerful method for SOEs today and in the future. It’s not feasible for SOE oversight to come solely from the Ministry; we need public sector involvement or partnerships, such as strategic or financial partners, as we’ve done in various restructuring efforts. These partnerships are key to ensuring sustainability,” Erick concluded.
