KUALA LUMPUR (Dec 1): Pharmaniaga Bhd will embark on setting up a halal insulin manufacturing plant at its high-technology plant in Pharmaniaga Lifesciences Puchong, according to the group’s managing director (MD) Datuk Zulkarnain Md Eusope.

He also said at an analyst briefing on Wednesday that the pharmaceutical company’s effort to set up the world’s first halal vaccine plant is progressing well.

“Overall, our next three to five years strategic plan is very solid [and] on a strong footing, well planned for expansion of the market share and business growth, both locally and internationally,” he said at the briefing for Pharmaniaga's third quarter ended Sept 30, 2021 (3QFY21) results.

“The vaccine plant has been planned since 2017 [and] when the Covid-19 pandemic came, it expedited our business growth for vaccine manufacturing, we have repurposed our plant in Puchong to produce vaccines. The vaccine plant will also be the world’s first halal vaccine plant after going through a technology transfer programme with Sinovac Biotech Ltd. 

“We have a few vaccine experts in our company and we have discussed with our partners in few countries for the antigen [development], now we are moving forward to strengthen our footprint in the vaccine and insulin business in the future while being in talks with other countries to export our 'fill and finish' vaccines, specifically Myanmar and African countries subject to regulatory approvals,” he noted.

Zulkarnain said its logistics and distribution business with the Ministry of Health will continue and the company is in negotiation with the government to further expand it beyond 2024 as the size of the business is good for the company.

Pharmaniaga’s chief financial officer Noraini Mohamed Ali said the company had earmarked a capital expenditure (capex) of RM107 million for FY21 for its manufacturing division, specifically its halal vaccine and insulin plant, while a further RM295 million is earmarked in FY22 for its logistics and distribution division, which includes the expansion of warehouses, digitalisation, while maintaining its halal vaccine and insulin plant development as well as introducing automation, digitalisation and procuring software for its Indonesian business.

Meanwhile, Pharmaniaga’s deputy MD Mohamed Iqbal Abdul Rahman shared the company’s plans for the future which includes expansion into other markets besides Malaysia and Indonesia, expansion of its product portfolio specifically biomedical equipment, as well as its world’s first halal vaccine plant and halal insulin plant.

He said the halal insulin plant costing RM60 million in capex is expected to be ready in 2025, and is planned to meet the need for diabetes treatment as Malaysia has the highest diabetic population (18% of the population) in Asia according to official data in 2019.

“The halal insulin plant will enable us to be less dependent on imports of insulin,” he added.

The halal insulin plant was first studied in 2018 and was concluded in 2020, it will produce pre-filled insulin cartridges in the form of self-administered "pens" according to the deputy MD.

“Overall, we have seven manufacturing plants: six in Peninsular Malaysia, one in Indonesia, we have 38 logistics and distribution centres: five in Peninsular Malaysia, 33 in Indonesia. We are looking at adding another one in the east coast of Peninsular Malaysia and two more in Bintulu and Sandakan which we will announce once we have the set-up completed.

“We are looking to grow in Indonesia as well, we need to have our own physical presence in Indonesia by adding at least one more [logistics and distribution centre] each year and more if necessary,” Iqbal said.

Iqbal added that its workforce has grown beyond 3,600 — 2,400 in Malaysia, 1,200 in Indonesia — as last reported due to an increase in technical staff to 450 including scientists, pharmacists and chemists while stating that it is not affected by labour shortages as they employ locals for its businesses in Malaysia and Indonesia except for technical experts who are unavailable.

Speaking on its financial performance, Noraini highlighted its working capital needs to be improved as it had spent more to procure buffer stocks since the government had added new products to its concession list.

“In terms of working capital, we talk about inventories, receivables, payables, and borrowings, this is quite alarming as you can see the amount, inventories is RM1.1 billion mainly because we have already mentioned to the public that we are readily available in terms of our Covid-19 stocks of about 10 million, which is why our inventories are higher,” she said.

She concluded that the company is positive about declaring a dividend for 4QFY21.

At the time of writing, Pharmaniaga’s stock was down half sen or 0.6% to 83 sen valuing it at RM1.14 billion.