7-Eleven Malaysia (SEM)is venturing into Indonesia’s pharmacy business through a joint venture between its 75-per-cent owned subsidiary, Caring Pharmacy Retail Management, and PI Era Prima Indonesia (EPI).
The JV aims to roll out a retail pharmacy chain in Indonesia after first creating a distribution business, although the planned size and geographic spread of the chain was not disclosed.
The new company, 50.1 per cent of which is owned by Caring, will trade under the name PT Era Caring Indonesia (DistributionCo). The total funding required for the proposals of about US$2 million will be funded from internally-generated funds of Malaysian-listed 7-Eleven.
“The proposals represent an opportunity for the SEM Group to venture into the pharmaceutical industry in the Republic of Indonesia,” the company said in a statement.
Under the agreement, EPI’s subsidiary, Retail Co, will undertake to retail under the brand Wellings Pharmacy in Indonesia as licensees.
“The SEM Group is leveraging on the reputation of the Wellings brand among the Indonesians medical tourists who frequent the SEM Group’s Wellings pharmacy outlets in Penang, Malaysia,” the company said.
“Once the businesses of the DistributionCo and RetailCo are on-stream, they are expected to contribute positively to the future earnings of the SEM Group.”
Indonesia’s medicines market was valued at US$7.6 billion last year and is estimated to reach US$12.6 billion, reflecting a compound annual growth rate of 10.7 per cent, according to Fitch Solutions.