Pharmaniaga Berhad (467709-M

)
No.7, Lorong Keluli 1B
Kawasan Perindustrian Bukit Raja Selatan
Seksyen 7, 40000 Shah Alam
Selangor Darul Ehsan, Malaysia
Tel : 03-3342 9999 Fax : 03-3341 7777
(A member of UEM Group)

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Pharmaniaga Overview
Pharmaniaga Berhad is the largest integrated local healthcare public listed company in the Main
Board of Bursa Malaysia. Its core business is manufacturing generic pharmaceutical, logistics
and distribution, sales and marketing, supply medical product and services, hospital equipment.
The Pharmaniaga Berhad subsidiaries companies are:
i
ii
iii
iv
v
vi
vii
viii
ix
x
xi

Pharmaniaga Logistics Sdn Bhd
Pharmaniaga Marketing Sdn Bhd
Pharmaniaga Manufacturing Berhad
Pharmaniaga Diagnostics
Pharmaniaga Research Centre Sdn Bhd
Safire Pharmaceuticals (M) Sdn Bhd
Pharmaniaga LifeScience Sdn Bhd
Pharmaniaga Diagnostics Sdn Bhd
Pharmaniaga Intermational Corporation
PT Millennium Pharmacon International Tbk (Indonesia)
Pharmaniaga Pegasus (Seychelles) Co. Ltd

Company Profile
Company Name

Pharmaniaga Berhad.

Business Type

Manufacturer, Trading Company,

Product/Service

Distributor/Wholesaler
Medical Disposable &

Address

Devices,Pharmaceutical Item
7,Lorong Keluli
1B,Kaw.Perindustrian Bukit
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Raja,Selatan,Seksyen7
Company Website
Ownership & Capital
Year Established
Trade & Market
Main Market

Export Percentage
Factory Information
Management Certification:
Contract Manufacturing

1

CURRENT SITUATION

1

CURRENT PERFORMANCE

http://www.pharmaniaga.com
1993
Southeast Asia
Africa
Oceania
Mid East
Eastern Asia
31% - 40%
ISO 9001:2000
OEM Service Offered

Pharmaniaga Group its revenue for the 2010 financial year improved by 6 per cent compared
with the previous year but pre-tax profit contracted by 44.2 per cent to RM45.5 million, from
Rm81.4 million recorded in 2009.
The lower profit was due to the a RM20 million provision for the slow moving product,
oseltamivir, coupled with an increase in administration, selling and distribution expenses. Higher
sales to government hospitals and higher tender sales contributed to an increase in revenue in the
fourth quarter of 2010 by 16.1 per cent to RM376.1 million, against RM323.9 million registered
in the same quarter last year. The group foresees strong competition in the private sector market,
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and remains focused on strategies and initiatives to grow market share in its core businesses. The
company will also continue to enhance production efficiency and cost control as part of its
initiatives to improve competitiveness and profitability.
2

STRATEGIC POSTURE

Pharmaniaga Berhad is the largest integrated local healthcare company in Malaysia. Its core
business is generic pharmaceutical products, while the principal activities are manufacturing of
generic pharmaceuticals, logistics, distribution, sales, marketing, supply of medical products and
services and hospital equipments. The essence of Pharmaniaga is the seamless amalgamation of
these key disciplines, represented by an entirely integrated group of companies, processes and
people that uphold our commitment to deliver quality products and services at all times. The
company is driven by their goal to enrich the lives of all those they come into contact with be it
their employees, customers and business partners or the patients who benefit from their products
and services. Pharmaniaga Berhad’s commitment is to enrich life together guided by the
philosophy of doing business with conscience; a philosophy the company continues to nurture as
it journeys towards becoming a global total integrated healthcare solutions provider. The vision
of Pharmaniaga is to be the preferred pharmaceutical brand in the regional markets and to
provide quality products and superior services by professional, committed and caring employees
as a mission.
Whistle Blower Policy was established and approved by the Board in 2008 to provide a platform
and to act as a mechanism for parties to channel their complaints or to provide information on
fraud, wrongdoings or non-compliance to any rules/procedures by the employee or management
of the Company. The policy outlines when, how and to who a concern may be properly raised,
distinguishes a concern from a personal grievance and allows the whistle-blower the opportunity
to raise a concern outside this management line and in confidence. The identity of the whistle
blower is kept confidential and protection is accorded to the whistle blower against any form of
reprisal or retribution. Any concerns raised will be investigated and a report and update is
provided to the Board.

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2

CORPORATE GOVERNANCE

2.1. BOARD OF DIRECTORS
The Board, with its collective and overall responsibility in leading and directing Pharmaniaga’s
strategic affairs, has the ultimate responsibility for corporate governance and plays a key role in
charting the vision, strategic direction, development and control of Pharmaniaga Group as well as
overseeing the investments of the Company. The Board believes that effective corporate
governance is premised on three important cornerstones namely, independence, accountability
and transparency.
The Board of Directors of Pharmaniaga presently consists of five (5) members comprising one
(1) Non Independent Non Executive Chairman, one (1) Executive Director designated as the
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He is the founder and Group Chief Executive of Symphony House Berhad. a listed outsourcing group and the Executive Chairman of Bolton Berhad.Managing Director. 46. given the size and nature of the business of Pharmaniaga.1 Profile by directors DATO’ MOHAMED AZMAN BIN YAHYA Non-Independent Non-Executive Chairman Dato’ Azman. and three (3) Independent Non-Executive Directors. a Malaysian. With the formation of the Board Advisory Panel. a listed property group.1. the Board believes that the composition of the Board has the right blend of skills. has been the Non-Independent Non-Executive Chairman of Pharmaniaga Berhad since 15 November 2001. knowledge and business experience around the Board table. Prior to this. 2. Dato’ Azman was appointed by the Government of Page | 6 .

MOHAMAD BIN ABDULLAH Managing Director Mohamad. Outside his professional engagements. Malaysian Airline System Berhad and PLUS Expressways Berhad. Prior to this appointment. Khazanah Nasional Berhad. the Special Taskforce to facilitate Business (PEMUDAH) and the Malaysian Economic Council. Mohamad Page | 7 . the National Council for Scientific Research & Development. the latter as the Chief Executive. Dato’ Azman is also active in public service. Mohamad was the Chief Financial Officer (CFO) of UEM Land Sdn Bhd (now a listed entity. which was set-up by Bank Negara Malaysia to mediate and assist in the debt restructuring of viable companies until its closure in 2002. the investment arm of the Malaysian Government. He was also the Chairman of the Corporate Debt Restructuring Committee (CDRC).Malaysia in 1998 to set-up and head Danaharta. the Malaysian Institute of Accountants (MIA) and a Fellow of the Malaysian Institute of Banks. His previous career includes auditing with KPMG in London. 49. has served Pharmaniaga Berhad as the Managing Director since his appointment on 1 January 2007. finance with the Island & Peninsular Group and investment banking with Bumiputra Merchant Bankers and Amanah Merchant Bank. the National Innovation Council. a Malaysian. and subsequently became its chairman until 2003. (ICAEW). Dato’ Azman also serves as a member of the Bursa Malaysia Securities Market Consultative Panel. Dato’ Azman is also a Director of Scomi Group Berhad and the Chairman of the Motorsports Association of Malaysia. He graduated with a first class Honours Degree in Economics from the London School of Economics and Political Science and is a Member of the Institute of Chartered Accountants in England and Wales. He sits on the boards of a number of Government Linked Corporations namely. the national asset management company. UEM Land Berhad) since 1 December 2004 and was promoted to Chief Operating Officer on 1 January 2005.

Having played a key role in Faber Group’s Corporate and Debt Restructuring. Risk Management Committee and member of the Audit Committee. He was then transferred to Faber Group Berhad. an audit firm. Salleh & Co. Corporate Affairs. Wong. Prior to that he was with Azman. Mohamad moved to Kejora Holdings Sdn Bhd. DATUK SULAIMAN BIN DAUD Senior Independent Non-Executive Director Datuk Sulaiman. is the Senior Independent Non-Executive Director of Pharmaniaga Berhad. He is a member of Cluster Working Group (CWG) on Healthcare Biotechnology under the Malaysian Biotechnology Corporation Sdn Bhd. He had his early exposure in investment banking when he was working with Arab Malaysian Merchant Bank from 1988-1991. on1 December 2004. United Kingdom. he was promoted to Chief Financial Officer of Faber Group Berhad. an associate company of UEM Group Berhad. In early 2004. Finance.holds a Master of Business Administration from University of Bath. He is also the Chairman of the Investment Committee. and upon being promoted. He had an illustrious career with Malaysian Tobacco Company Berhad (MTC) where he Page | 8 . In 1992. 63. the commercial arm of Kejora Group as the Group’s Corporate Finance and Audit Manager where he served for 4 years. a Malaysian. assumed the position of Senior General Manager. and was subsequently promoted to General Manager. he was transferred to UEM Land. Nomination & Remuneration Committee.. then joined Park May Berhad as its Financial Controller in March 1996.

from 1998 to 2006. is an Independent NonExecutive Director of Pharmaniaga Berhad. He has served as a Board Member of University Putra Malaysia and the Chairman of the Malaysia Syria Business Council. He was appointed to the Board on 15 November 2001. DATO’ WIRA. SALLEH Independent Non-Executive Director Emeritus Prof. He has also been a Director of Malaysia National Insurance Berhad and Chairman of Ranhill Power Berhad. He is also a Director of UMS Link Holdings Sdn Bhd and the Chairman of UMS Link Agro Based Sdn Bhd as well as Director and Chairman of a number of private companies in Malaysia and abroad. EMERITUS PROF. a Malaysian. he has been appointed as an Advisory Panel Member of the Commercialisation Committee for all public Universities in Malaysia. He spends a considerable part of his time now seeking and developing business opportunities in Asean and the Middle East. France. MOHAMMAD NOOR BIN HJ. Dato’ Wira Ir. Prior to his present position as President of Kuala Lumpur Infrastructure University Page | 9 . Mohammad Noor. graduating as the Most Outstanding Student in 1968. IR. He has a Masters in Business Administration from IMC Buckingham and he graduated from Stanford-Insead Advanced Management Programme in Fontainbleau.ascended the corporate ladder to be its Deputy Chief Executive/Executive Director. He is currently the Chairman of Malaysia Packaging Industry Berhad and Director of Konsortium Transnasional Berhad and Silverlake Axis Limited in Singapore. 62. Dr. More recently. He has a diploma in Agriculture from the College of Agriculture (now University Putra Malaysia).DR. He has been the Chairman of Bank Pertanian Malaysia for four terms.

61. he was the Vice President of Open University Malaysia. Mohammad Noor has a Ph. Page | 10 . in Civil Engineering from the University of Strathclyde. Fellow Member of Institution of Engineers Malaysia and a Member of the Malaysian Institute of Management. Emeritus Prof. a Malaysian. He was appointed to the Board on 12 December 2005.College. UK. He held the position of Vice Chancellor of Universiti Pendidikan Sultan Idris and a similar position in Universiti Utara Malaysia and was the Deputy Vice Chancellor in Universiti Teknologi Malaysia before that. Oh is a member of the Malaysian Institute of Certified Public Accountants (MICPA). Dato’ Wira Ir. He sits in the Audit Committee. OH KIM SUN Non-Independent Non-Executive Director Oh Kim Sun. is a Non-Independent Non-Executive Director of Pharmaniaga Berhad.D. Glasgow. Dr. Nomination & Remuneration Committee and Risk Management Committee. He is the Chairman of the Audit Committee and a member of the Investment Committee and Nomination and Remuneration Committee. He is currently a Fellow of the Academy of Science Malaysia.

Financial Controller of ICI Malaysia and Finance Manager (Secondment) of ICI Headquarters in London. the Board approves Pharmaniaga Group’s strategic plan and its annual budget.2 Roles and Responsibilities of Chairman and Managing Director The roles and responsibilities of the Chairman of the Board and the Managing Director are distinct and separated. UEM Land Holdings Berhad and Nikko Electronics Berhad. The Managing Director has the general responsibility for running the business on a day-to-day basis thus ensuring a balance of power and authority so as to provide safeguard against the exercise of unfettered powers indecision making. responsible for Northern Europe. The Board’s principal focus is the overall strategic direction. reviews the Page | 11 . 2. Oh led a successful management buyout of ICI’s Malaysian operations in 1994 and was appointed Group Executive Director of Chemical Company of Malaysia Berhad until 2003. he began his career in 1972 with Coopers & Lybrand in London. His directorships in other public companies include Faber Group Berhad. He has over 36 years of experience in finance and has held various positions such as Finance Director of Taiko Plantations Sdn Bhd. and throughout the year. As such. He is also a Director of IMPAX Laboratories Inc..An accountant by training.1. development and control of Pharmaniaga Group. The Chairman is responsible for the conduct of the Board’s discussions and that these are conducted in such a way that all views are taken into account before a decision is made. a company listed on National Association of Securities Dealers Automated Quotations (NASDAQ).

It is the Board’s belief that having a whistle blower policy in place will increase investor confidence in the Company. including all strategic projects and regulatory developments. which operate within clearly defined written terms of references on which the Committees deliberate the issues on a broad and in depth basis before putting up any recommendation to the Board. As such. The Directors’ Code of Conduct. 2. Accountability is part and parcel of governance in Pharmaniaga . In performance of the Board duties.whilst the Board is accountable to the shareholders. The Board has established five Board Committees. The Board has entrusted specific responsibilities to the Board Committees. creditors and customers as well as its social responsibilities. supports good management and at the same time demonstrates accountability.performance of the operating subsidiaries against their budgets and targets. which forms part of the Board Policy Manual sets out the performance of Directors’ duties and conduct in relation to Corporate Governance. The Board ensures that the Management acts in the best interest of the Company and its shareholders by working to enhance the Company’s performance. The Managing Director is responsible for the implementation of the broad policies approved by the Board and he is obliged to report and discuss at the Board Meetings all material matters currently or potentially affecting Pharmaniaga Group and its performance. good risk management and sound corporate governance practices. Management is accountable to the Board. A whistle blower policy strengthens. the Board also observes a Directors’ Code of Conduct which continues to govern the standard ethics and good conduct expected from the Directors. its relationship with the shareholders.2 TOP MANAGEMENT Page | 12 . employees.

Mohammad Noor bin Hj Salleh Page | 13 . Dr.2.2. Dato’ Wira Ir.1 Nomination& Remuuneration Commitee The members of the Audit Committee are: • • • Datuk Sulaiman bin Daud (Chairman) Oh Kim Sun Emeritus Prof.

ability to discharge functions or responsibilities. To annually carry out the process to be implemented for evaluating the effectiveness of the Board as a whole. To recommend suitable orientation.  remove or dismiss thereafter. and to  identify areas for improvement. and its terms and conditions. To advise the Board of the performance of the Managing Director and an assessment of his/her entitlement to performance related pay. fringe benefits and other terms of employment of  Executive Director and the Managing Director. To assist the Board in the annual review of the required mix of skills. To set. To consider the following when recommending candidates for directorship such as  skills. integrity. knowledge. experience and other qualities. Page | 14 . expertise and experience. To review the history of and proposals for the remuneration package of each of the Company’s committees. It is also to identify and recommend for all directorships proposed by the Managing Director. the Committees of the Board and the performance and contribution of each individual Director based on the process implemented by the Board.There are few objective of the Nomination & Remuneration Committee in Pharmaniaga Berhad:  To annually examine the size of the Board with a view to determine the number of  Directors on the Board in relation to its effectiveness. To represent the public interest and avoid any inappropriate use of public funds when  considering severance payments for senior staff. any Director or shareholder to fill the seats on the  Audit. for the Board’s approval. educational and training programmes to continuously  train and equip the existing and new Directors. Nomination & Remuneration or other Committees. To identify and recommend new nominees to the Board of Pharmaniaga Berhad and its subsidiaries and associated companies. shareholders or executives. which Non-Executive Directors should bring  to the Board and disclose the same in the Annual Report. To identify and recommend Senior Management position at Grade UT2 and above. professionalism. whether to be filled by Board members. The Committee also should advise the Managing Director on the remuneration and terms and conditions of senior management  staff holding Grade UT2 and above. To ensure that the appointment of any Executive Director or Managing Director shall be for a fixed term not exceeding 3 years at any one time with the power to reappoint. review. recommend and advise the policy framework on all elements of the remuneration such as reward structure. including core competencies.

appointed on 8 May 2009 Datuk Sulaiman bin Daud Emeritus Prof. which fulfils the following requirements:    The Audit Committee must be composed of no fewer than three members A majority of the Audit Committee must be independent Directors At least one member of the Audit Committee must be a member of the Malaysian  Institute of Accountants (MIA) or any equivalent qualifications recognized by the MIA No alternate director shall be appointed as a member of the Audit Committee The members of the Audit Committee shall elect a Chairman from among themselves who will be an Independent Director. the audit committee also has to ensure consistency with Bursa Malaysia commitments to encourage high standards of corporate disclosure and transparency. Dato’ Wira Ir. The Audit Committee is also Page | 15 . including the Chairman. All members of the Audit Committee. Besides. The Audit Committee will endeavor to adopt certain practices aimed at maintaining appropriate standards of corporate responsibility. Dr. will hold office only so long as they serve as Directors of Pharmaniaga Berhad. system of internal controls and risk management processes. The Audit Committee is responsible for monitoring. integrity and accountability to Pharmaniaga’s shareholders.2. The objectives of the audit committee in Pharmaniaga to to assist the Board to carry out their responsibilities and with the primary objective of assisting the Board of Pharmaniaga Berhad in fulfilling its fiduciary responsibilities relating to corporate accounting.2. Mohammad Noor bin Hj Salleh The Audit Committee shall be appointed by the Board of Directors from amongst its numbers. The Board of Directors must review the term of office and performance of the Audit Committee and each of its members at least once every three 3 years to determine whether the Audit Committee has carried out its duties in accordance with its terms of reference. overseeing and evaluating the duties and responsibilities of the Internal Audit and the external auditors as those duties and responsibilities relate to the organization’s processes for controlling its operations. and management and financial reporting practices of the Group.2 Audit Commitees The members of the Audit Committee are: • • • Oh Kim Sun (Chairman) .

whilst the Board determines their remuneration. excluding the attendance of other directors. internal auditors or both.2. They have authority to obtain independent professional or other advice and to invite outsiders with relevant experience to attend the Committee’s meetings and to brief the Committee. The appointment of the External Auditors is subject to the approval of shareholders at the Annual General Meeting. 1965 and applicable Reporting Standards in Malaysia. the Audit Committee will have the following rights. It is a policy of the Audit Committee that it meets with the External Auditors at least twice a year to discuss their audit plan. records. Finally. Other than that. through the Audit Committee. whenever deemed necessary. Head of internal audit should report directly to audit committee. the External Auditors and other outside advisors have been satisfactorily resolved by the Management. properties and personnel of the Company and of any other companies within the Group. Finally. executive members of the Committee and employees of the company. through the Audit Committee. seeks the External Auditors’ professional advice in ensuring compliance with the provisions of the Companies Act. In carrying out its duties and responsibilities.3 External Auditors The Board maintains a transparent and professional relationship with the Auditors. They also have full. they have direct communication channels with the external auditors and person carrying out the internal audit function or activity. they have discretion to invite other Directors and employees of the Company to any particular Audit Committee meeting with specific relevance and authority to convene meetings with external auditors. conferred with the authority to directly liaise with both the External and Internal Auditors. audit findings and the Company’s financial statements as well as any other issues without any Executive Directors and the management present. free and unrestricted access to any information.responsible for determining that all major issues reported by the Internal Auditors. Page | 16 . the Audit Committee is responsible for assisting and reporting to the Board matters deemed critical to the organization’s controlling processes and risk management activities including the implementation of the appropriate systems to manage risks. 2. The Board. They have explicit authority to investigate any matter within its terms of reference and have the resources required performing its duties.

and advice on best practices that will improve and add value to the Pharmaniaga Group.2. GIA placed emphasis on a risk-based auditing approach. Internal audits are conducted to identify and report risks in units under the Group’s major core activities. The audit findings and recommendations. 2. 2.The role and responsibility of the external auditors are they audit plan. objective assurance on areas of operations reviewed. They have to meet with the Group External Auditor without the presence of management to discuss any matters that they wish to present.2. In the year under review.4 Group Internal Audit The Group Internal Auditors from UEM Group Management Sdn Bhd (“UEMGM”) continues to provide the internal audit support function to the Audit Committee and the Board during the year. GIA carried out audit programmer which focused on the management of the Group’s significant corporate risks and executed audit plans approved by the Audit Committee. The internal audit activities undertaken by UEMGM are in conformance with the International Standards for the Professional Practice of Internal Auditing issued by the Institute of Internal Auditors.5 Risk Management Committee Page | 17 . were communicated to the Audit Committee to enable a timely evaluation of the adequacy and integrity of the Group’s internal control system. In conducting their independent audit. They deliberated and reported the results of the annual audit to the Board and recommended to the Board the appointment and remuneration of the Group External Auditor. They also assessed the independence and objectivity of the external auditors during the year and prior to the appointment of the external auditors. The internal audit function of Pharmaniaga Group is carried out by the GIA of UEMGM. The Internal Auditor has the responsibility for ascertaining that the ongoing processes for controlling operations throughout the organization are adequately designed and are functioning in an effective manner. GIA provides independent. audit strategy and scope of work for the year. The results of the annual audit. procedures and guidelines. which also highlighted areas of non-compliance with the Group’s policies. taking into account the Group’s objectives and policies in the context of evolving business and regulatory environment. their audit report and Management letter together with Management’s response to the findings of the external auditors. The Committee also received reports from the external auditors on their own policies regarding independence and the measures taken to control the quality of their work.

The Audit Committee then reports to the Board significant changes in the business and the external environment. major findings and management responses thereto on material issues. The functional of the Risk Management Committee are as below:    To provide oversight. people risk and information technology risks. direction and counsel to the risk management process To establish risk management guidelines To evaluate the structure for the Group risk management. The Audit Committee then reports to the Board on the status of the risk management. strategic risk. which affect the key risks. financial risk. In this way. Dr.6 Investment Committee Page | 18 . product risk.2. the RMC updates the Audit Committee the significant changes in the business and the external environment which affect the key risks. changing environments and required  urgent changes in the risk management programmer To review and approve action and contingency plans developed to mitigate key significant  risks To advise the Board on risk related issues and recommend strategies. The Committee also reviews and evaluates the adequacy of overall risk management policies and procedures and ensures that there is adequate risk reporting of core business activities. Mohammad Noor bin Hj Salleh Stephen Sze Kwong Yew Raja Nazim bin Raja Nazuddin Errman Zuhady bin Zainal This Risk Management Committee (RMC) was established with the primary responsibility of ensuring the effective functioning of the integrated risk management function within the Pharmaniaga Group. On risk management. Dato’ Wira Ir. risk management processes and  support system To consider the half yearly report on risks. internal processes risk. policies and risk tolerance for Board approval 2. customer risk. The Board monitors the implementation of the risk strategies and any changes to the risk profiles are highlighted to the Board for consideration.The members of the Audit Committee are: • • • • • • Datuk Sulaiman bin Daud ( Chairman) Mohamad bin Abdullah Emeritus Prof. RMC assists the Board of Directors to oversee the overall management of all risks covering industry risk. the Board will ensure that the risk strategies are progressing according to the implementation plan. highly significant risks. country risk.

At the Initial Investment Initiation stage investment committees have to review and approve for the Company to precede with the investment initiation activities. or where authorized decisions on behalf of. The roles and responsibilities of the investment committee are as below:   To review and recommend to the Board the investment policies and strategies. understanding and/or contracts which may include equity participation of the Company. Subsequently report the findings to the Board. including all strategic projects and regulatory developments. if the Committee is satisfied that the investment is viable and for overseas ventures. the Board in respect of investments and matters related thereto. The Managing Director is responsible for the implementation of the broad policies approved by the Board and he is obliged to report and discuss at the Board Meetings all material matters currently or potentially affecting Pharmaniaga Group and its performance. is in line  with the overall Expansion Strategy adopted by the Group. The Committee is given the power to authorize the Company to enter into any agreements. To receive quarterly reports. deliberate and decide on the compliance with the overall  investment policies and strategies. 2.The members of the Investment Committee are: • • • Datuk Sulaiman bin Daud ( Chairman) Mohamad bin Abdullah Oh Kim Sun The Investment Committee assists the Board in fulfilling its obligations by receiving reports.7 Managing Directors The Managing Director of the Pharmaniaga Berhad is Mohamad bin Abdullah.2. He has the general responsibility for running the business on a day-to-day basis thus ensuring a balance of power and authority so as to provide safeguard against the exercise of unfettered powers in decision making. understanding and/or contracts with potential partners’ initiation stage and approve such terms in relation to the said agreement. The Investment Committee also plays a key role in the Business Expansion and Growth strategies of the Group by reviewing the viability of proposals or projects or investments at the Initial Project Assessment Stage and providing appropriate direction to the Management. Accountability is part and parcel of Page | 19 . evaluation and making recommendations to.

whilst the Board is accountable to the shareholders. Pharmaniaga has developed and maintained an Investor Relations Policy to ensure a high level of quality and service is achieved when information is provided to investors and stakeholders. the timely releases of financial results. There are 30 largest shareholders as per the Register of Depositors. contents of which are continuously enhanced to take into account developments amongst others in corporate governance practices. Apart from the mandatory requirement to make public announcements via Bursa Malaysia. financials and other key activities is the Annual Report of the Company. in line with Main Market Listing Requirements Bursa Malaysia provide shareholders with an overview of Pharmaniaga Group’s performance and operations. Pharmaniaga also disseminates information on corporate events and business as well as any significant developments of Pharmaniaga Group through press releases. Besides the key channels of communication through the Page | 20 . 2. 3 substantial shareholders as per the Register of Substantial Shareholders and directors’ shareholding as per the Register of Directors' Shareholding in Phamarniaga. A key channel of communication used to provide its shareholders and investors with information which include its business.3 SHAREHOLDERS Pharmaniaga is committed to maintaining a constructive relationship with its shareholders. pursuing its on-going commitment to sustain the highest standards of corporate governance practices throughout the Group with full appreciation of its impact on long term corporate performance and optimal shareholder value. Further.governance in Pharmaniaga . Management is accountable to the Board. In this regard.

waste management system. chemical handling. to comply with Malaysia’s relevant EHS regulations within the scope of Pharmaniaga’s operations. care has been taken to ensure that any information that may be regarded as undisclosed and market sensitive information such as corporate proposals.Annual Report. Therefore. like arable lands. not conserve. Thirdly. financial results and other material information about Pharmaniaga Group will not be given to any shareholder or shareholder group without first making an official announcement to Bursa Malaysia for public release. general meetings and announcements to Bursa Malaysia as well as analyst and media briefings. or fresh water. installation and engineering control.1 NATURAL PHYSICAL ENVIRONMENT: SUSTAINABILITY ISSUES The natural environment includes physical resources. to generate the Page | 21 . occupational diseases and illnesses by taking pre-emptive measures in the form of process modification. diamond mines. such as the availability of fresh water and clean air. A business corporation must thus scan the natural environment for factors that might previously have been taken for granted. Until the 20th century. injuries. Pharmaniaga gives a high priority to protecting the environment and assuring the health and safety of employees. wildlife. Health & Safety (EHS) Policy statement as follows.This commitment is declared in the Environmental. adherence to established procedures and the efficient use of resources. but also upon the natural ecosystem in which the firm is embedded. Secondly. It was view as a free resource. it must be wary of the legal and regulatory framework governing the release of material and price sensitive information. stakeholders and interested parties who come to our premises in the course of business. something to be taken or fought over. the natural environment was generally perceived by business people to be a given something to exploit. 3. firstly.0 EXTERNAL ENVIRONMENT: OPPORTUNITIES AND THREATS (SWOT) 3. accidents. and climate that are an inherent part of existence on Earth. While the Company endeavors to provide as much information as possible to its shareholders. to prevent pollution. there is also continuous effort to enhance the Company’s main website Information that is disseminated to the investment community conforms to Bursa Malaysia disclosure rules and regulations. The concept of sustainability argues that a firm’s ability to continuously renew itself for long term success and survival is dependent not only upon the greater economic and social system of which it is a part. deep water harbors.

Pharmaniaga designed a programme to ensure that the Company would operate in an environmental-friendly manner. Waste management is a key component of the programme and ensures that all wastes are disposed off without polluting the environment. From the data gathered. Pharmaniaga is committed to reducing energy and water use throughout its research and development. This focus results in more efficient. safety and health values are not compromised. Pharmaniaga had over the last few years put in place various measures and initiatives to ensure a more effective and efficient Environment. A baseline analysis was first done to gauge Pharmaniaga’s current levels of compliance with statutory requirements and to outline remedial measures. Pharmaniaga also conducted an aspect and impact analysis with regard to the Company’s impact on the environment. the Group has undertaken several measures to ensure that environmental. cost effective operations while conserving natural resources vital to the Group operations and the communities in which it operates. Pharmaniaga actively seeks opportunities to minimize its environmental impact and reduce waste with particular attention on protecting the quality and availability of water and reducing air emissions through energy conservation. Kota Kinabalu and Kuching. Hence. from the receiving of materials through to testing activities and on to the final storage and delivery to customers. Safety and Health (“ESH”) system. The study covered the entire spectrum of operations at Pharmaniaga. Scheduled factory wastes and obsolete pharmaceutical products are disposed at the national waste management centre at Bukit Page | 22 . The programme also makes good business sense as it will result in significant cost savings for Pharmaniaga. health and safety aspects relating to our products and services.highest degree of EHS awareness amongst all employees. the Group achieved its target to extend ISO 14001 certification to all branches of Pharmaniaga Logistics Sdn Bhd in Juru. Several committees have been formed to spearhead the ESH issues to ensure that all statutory guidelines are adhered to. and provide skills and knowledge training in environmental. To achieve excellence in EHS performance by promoting continual improvement and constantly reviewing our objectives and targets based on risk assessment records and implemented programmes. After completing three phases of consultation and training by its internal committee. manufacturing and distribution processes. SIRIM recommended the extension of ISO 14001 to all branches. Due to such efforts.

The vast majority of scheduled waste is incinerated and the Group managed to reduce scheduled waste generated per kilogram by 20. The emission of carbon monoxide from our own fleet of lorries and vans is also regularly monitored. Pharmaniaga has corporate standards and guidelines in place to ensure that its facilities meet or exceed regulatory requirements regarding the treatment and management of wastewater effluents.0 per cent and Reject products decreased by 63. the Group continues to promote recycling as a preferred alternative to disposal. Pharmaniaga’s objective is to reduce scheduled wastes from rejected materials by 10%. The main components of scheduled wastes (discarded drugs) are raw materials. An average 240 pallets were reused in the packaging processes during the year under review. For the year 2009. Contaminated materials per output decreased by 40. Pharmaniaga tracks scheduled waste sent off-site from their facilities. including cardboard. In sync with that. either in the form of depleted oxygen levels (total suspended solids and chemical oxygen demand) or toxicity to human and aquatic life (nitrates) to arrive at a total for discharge of general pollutants. that can no longer be used as it was originally intended and must be modified in some way for beneficial reuse or destroyed to render it harmless to human health and the environment. Pharmaniaga defines nonhazardous wastes as those wastes discarded from manufacturing. However. solid and liquid. The Group will continue to collect metrics on these parameters.0 per cent despite the increase in production in 2007 with the implementation of full utilization of materials related to the manufacturing process. plastics and off-spec product. Negeri Sembilan. and disposal of nonhazardous waste. distribution. scheduled waste is defined as any material. The chart shows the amount of scheduled waste disposed. For tracking purposes. recycling. cartons and other materials. products and dust collector. The Group measures parameters that contribute to water quality degradation.Nanas. Nonscheduled wastes are addressed through a recycling programme that resulted in a 30% reduction in 2010. and administrative sources. The Group has continuously recycled all other packaging materials such as boxes. The Group tracks its generation. The quality of effluent water discharged from the plant met the Standard A requirements. paper. Page | 23 . A new target for 2011 is to reduce paper usage by 15%.6 per cent as a result of improvements in overall manufacturing process. the Group started to monitor the usage of pallets since July 2007.

2 SOCIETAL ENVIRONMENT From the overall SWOT analysis. the Group encourages them to contact the engineering and facility management. Pharmaniaga also get opportunity in increasing healthcare costs and consumer awareness boosting demand for cheaper locally manufactured drugs. Pharmaniaga also gain opportunity that overseas expansion through local manufacture. and Safety Committee reviews these programmes annually and reports its findings to senior management. joint ventures and product launches.4 g/Nm3. The treats facing by Pharmaniaga is the company’s growth and performance dependent upon economic conditions in Malaysia and other countries. the average of particulate level was 0. For the quality of air emission.0185 g/Nm3. such as noise and odours. In the event that odours or noise become a problem for any members of the community. can become significant if left unaddressed. the Philippines and Page | 24 . In the other hand. The Group understands that nuisance issues. The programmes objectives are supported by a number of other company initiatives that require consideration of energy issues. Health. The Environment. particularly Singapore. Pharmaniaga collects and reports data on electricity use and fuel usage from its manufacturing facilities in Bangi. The opportunities that having is government support for local drug makers. expected growth in Malaysia’s pharmaceutical industry and the biotech sector also help to improve the performance of Pharmaniaga. well below the requirement level of 0.Pharmaniaga is committed to working with its neighbors to ensure that its operations do not negatively impact the community. Each division is required to develop and maintain an energy management programme based on the characteristics of its specific operational situations. which produces less air pollution than oil fuel. the frequency of air monitoring has been reduced since 2004. The results from its monitoring of air quality have shown readings that are below the Malaysian Environment Quality Act limits. Besides. The majority of the fuel consumed by its facilities is natural gas. Due to consistent and excellent outcomes recorded. Pharmaniaga has its own opportunities and threat in the pharmaceutical and healthcare sectors from the societal environment.

key attractions of the Malaysian pharmaceutical market over the longer term will remain the government’s encouragement of the biotechnology sector and the country’s economic development. In BMI’s Business Environment Ratings matrix for the Quarter 3 of 2010. This phenomenon affect to the Pharmaniaga which is a leader in the pharmaceutical market. for Pharmaniaga. which is creating intense competition from new entrants such as India’s Ranbaxy. this is a good economic variable towards them that the price is can be manipulated. On the other hand. In the meantime. Malaysia is facing the problems that markedly behind South Korea. Pharmaniaga also facing threat of pricing that generic manufacturers competing on price due to weak patent law and wide variety of generics available. the pharmaceutical and healthcare sector is relatively low barriers to entry. especially due to the high out-ofpocket payment levels. However. 1 Economic Trends in the economic part of the societal environment can have an obvious impact on business activity. Pharmaniaga are likely to use the growing trade links Page | 25 . per-capita pharmaceutical consumption is quite low. On the others hand. The market is having a robust growth overall. which make the market vulnerable to economic downturns.7 previously. the country’s overall score was 54.Vietnam.2. further reducing profit margins. The government’s policy of tariff-free imports of pharmaceutical products also a biggest threat facing by Pharmaniaga as foreign competitors. In the current quarter. but there is hope for the remainder of 2010 as the economy slowly begins to get back on track. The trend towards the purchase of branded drugs over lowcost locally manufactured generic drugs to benefit importers of products from companies based in the US. Malaysia dropped from eighth to ninth place. UK and Germany. Singapore and Taiwan in terms of pharmaceutical expenditure and foreign direct investment (FDI). down from 55. This economic factor should be a way that to revise the Pharmaniaga mission and try their best to improve in foreign direct investment to explore their business in other countries. which will improve consumer purchasing power regarding pharmaceuticals. if compare to the last few years. Besides that. the company may eventually lose its generic supply agreement with the government or see less favorable conditions in the near term. having already slipped from fifth place in Quarter 1. It also is good news that absence of price controls in the private sector.

Indeed. Indian-based Avesthagen announced that it has begun manufacturing two biosimilar products at Inno Biologics’ Putra Nilai facilities in Malays. US-based biopharmaceutical company Emergent BioSolutions and government-owned Ninebio (9Bio) formed a joint venture in Malaysia for the production of biodefense biologics and vaccines. The Malaysian Biotechnology Corporation (BiotechCorp) is the leading agency responsible for the co-ordinated implementation of the National Biotechnology Policy (NBP). after Australia. The National Pharmaceutical Control Bureau (NPCB) has adopted the Guidance Document and Guidelines for the Registration of Biosimilars. CCM Duopharma.with the Middle Eastern Islamic markets for their halal medicines. With the government focusing on biotechnology as one of the new drivers of economic growth. 3. making Malaysia only the second country.2. the government is aiming to promote the biotechnology industry in order to attract foreign investment. Inno Biologics and Ninebio.Most recently. The most important biologic manufacturers include Bioven.But also a threat for the local companies that the biotechnology seemed dominated by the multinational companies.2 Technological Changes in the technological part of the societal environment can also have a great impact on multiple industries. in the Asia Pacific region to adopt regulations for biosimilar registration. while pharmaceutical companies have been aware of this niche for some time. Page | 26 . In March 2010. they have only recently begun explicitly targeting this growth area. This is good news for the pharmaceutical companies in order to manufacture high quality and better medicine for the patients. The government has identified biotechnology as one of the core technologies to accelerate the transformation of Malaysia into a knowledge-based economy and an industrialised nation by year 2020. a number of new biopharmaceutical research companies have emerged in recent years. with the sector already showing dynamism. Similarly.

electronic media and online. said Mohamad Abdullah. The products will be rolled out from 2012 for distributions in Asia Pacific. This is a good opportunity for Pharmaniaga that have their own website and always update their corporate information and news in the space. Pharmaniaga has 60 products in the market manufactured at its plant in Bangi which is 45 per cent utilised. managing director for Pharmaniaga. now is the age of technology.The government will also allow private healthcare providers to promote their services through all media. New markets will include the Middle East and Europe. Malaysia is an Islamic country. which will be produced at its plants in Bangi and Puchong in Selangor. will be investing more than RM300 million to develop 92 new products over the next five years to grow its business. advance technology involving high cost to fulfill customer’s expectation to get the cheap yet high quality pharmaceutical products. the country's largest integrated pharmaceutical company. However. therefore it is vital to make sure all edible products in Malaysia are halal. Mohamad said the group's financial performance is expected to improve in the second half of the year. Mohamad was optimistic on the outlook for the industry and said it will grow by 810 per year. will operate by the first quarter of 2011. including Malaysia. Currently. Pharmaniaga Bhd. driven by higher demand for pharmaceutical products in government clinics. which is being set up for RM138 million. Page | 27 . thus it is necessary for Pharmaniaga Company to follow the trend and fulfill the customer’s expectation. As we know. It is understood it will be spending more than RM300. Some of pharmaceutical product may need the “non-halal” ingredients to product it. including newspapers. it is one of the challenges for Pharmaniaga to modify them into halal products. The Puchong plant. It is a way to improve the competitive advantage among the competitors and awareness for the customers and investors.000 to develop each product. 3 Political – legal Trends in the political-legal part of the societal environment have a significant impact not only on the level of competition within an industry but also on which strategies might be successful. The Health Minister said the decision was taken to keep Malaysia in line with changes in the wider healthcare environment and to ensure that the country maintains its competitiveness to attract medical tourists. It has capacity to produce 40 million units per annum. That serves as one of the challenges for Pharmaniaga to make sure that all pharmaceutical products in Malaysia are Halal.

the effect from the plans will be increase the purchasing power of the patients and sales of Pharmaniaga will be increased. Demographic trends are part of the sociocultural aspect. Page | 28 . Pharmaniaga also will lose the opportunity to export the medical products to other countries. That is good time for Pharmaniaga explore their business into China. Malaysia's majority Muslim population and the government's ongoing efforts to boost Islamic finance could see Malaysia become a major financial hub over the medium-term horizon. which could be a long-term hindrance to economic expansion.This industry will also be supported by a reduction in the approval period for the registration of pharmaceutical products with single ingredients from six months to 60 days in 2011.2. This regulation undoubtful brings good news for Pharmaniaga in order to manufacturing a new medicine in a short period. it will be give effect to Pharmaniaga because the decreased budget for the pharmaceutical sector. 3. Besides that. Malaysia's membership of the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Cooperation/Scheme (PIC/S) puts local manufacturers in a good position to export to developed markets. This change in the regulatory framework is part of the government's efforts to encourage growth in the pharmaceutical industry. wages are higher in Malaysia than in a number of its competitors. the treat that the opportunity for private-sector-led growth will improve as the government continues divestment of state shareholdings in order to raise funds to narrow the budget deficit. Reducing the approval period will boost drugmaker revenue in the country and consequently facilitate foreign direct investment into manufacturing plants and research and development (R&D) facilities. the health ministry of China allowed the importation of medicines from Malaysia that had been certified by the Malaysian government. So if Malaysia ongoing to boost the Islamic Finance. In January 2009.4 Sociocultural Sociocultural is one of the part of the societal environment and have a significant impact to the business. But. The wages problem will be caused the cost of the drugs become higher than other countries. the demand of Government hospitals will be decreased and also bring effect to the sales volume. To maintain its competitive edge. according to Health Minister Datuk Seri Liow Tiong Lai. Pharmaniaga hold the 30% of this sector and distribute the medicine to the government hospital. Malaysia needs a steady stream of inward investment. the visitors to the government hospital commonly are Malays. This is a good economic opportunity towards the Pharmaniaga. such as China and Vietnam.

For the Pharmaceutical market. Pharmaniaga also will be effect because hiring the migrant labor due to decrease the manufacturing cost. 3 TASK ENVIRONMENT 3. it is not easily for them to produce the low price medicine.1 Threat of New Entrants New entrants of an industry typically bring to it new capacity. there is a lots entry barrier for the new entrants. so that for the new entrants. but it also will be cash out to others countries and did not help to boost the domestic economy.3.Other than the wages problem. and substantial resources. For the product differentiation’s point. A competitive move by one firm can be expected to have a noticeable effect on its competitors and thus may cause retaliation. In Page | 29 . 3.3. particularly for low-skilled jobs. a desire to gain market share. it will caused the cash flew out to other countries. Malaysia's dependence on migrant labour. the manufacturing process and raw material is strictly control. The economics of scale is a possible entry barrier because the exits pharmaceutical companies already have their own plant and efficiency in manufacture the medicine. For the long term economic foreseeing.2 Rivalry among Existing Firms In most industries. poses a threat to long term economic stability. it can be concluded that the threat of new entrants into the industry is medium. it is also easily found at many retail shops not only in the pharmacy. Government policy maybe a strict barrier to get entry in this field because the health issues is important to all the people so that licensing requirements. So that. this is not a high entry barrier because the medicine need to used in always same and common. Some of the entry barriers is because of the needs of expertise in this field and high advanced technology to manufacture the medicine. corporations are mutually dependent. also a treat.

In conclude. So. there are few companies dominated the industries. also have the foreign pharmaceutical industry. the rivalry among the existing firms is low. outside the ED segment. the traditional medicines are frequently used by the Malaysian. The Pharmaniaga is dominated 30% of market share in this industry. the ED treatments have also been a frequent target of counterfeiting activities. the threat of substitute products or services is high. research and development company.S. The drugs also compete directly with Pfizer’s Viagra (sildenafil). Apex Healthcare. Its value chain management is strong compare with others. German drug giant Schering AG (now part of Bayer). Besides. leading Indian drugmaker Ranbaxy and Belgium-based Agfa have made known their intentions to expand activities in the country. German pharmaceutical company Bayer and GlaxoSmithKline Malaysia (a subsidiary of British GSK) entered the market with the introduction of Levitra (vardenafil). for example Johnson and Johnson is getting involved in biotechnology field and market for ED treatments.Pharmaceutical Markets in Malaysia.2mn men in the country. Other multinationals are also making more concerted efforts to capture higher market shares in Malaysia. 4 Bargaining Power of Buyers Page | 30 . with the latter planning to create a regional R&D centre in Malaysia. some of the old generations still believe in the usage of traditional medicines instead of the modern medicine. often in tandem with modern drugs. Pharmaniaga do not faced a big competition among its competitors because it has a comprehensive management with its own plant. with the condition affecting estimated 2. They are Pharmaniaga. 3 Threat of Substitute Product or Services In Pharmaceutical industry. However. CCM Duopharma. which launched its ED drug Cialis (tadalafil) in January 2004. and Ranbaxy intending to establish its Malaysian operations as a regional manufacturing base. besides domestic pharmaceutical industry.P Southeast Asia and Kotra Industry. Y. distribution company and also manufacturing company. However. the main players in the field include US major Eli Lilly. Hovid. The rate of the industry growth is slower than other industries because the competition is not only between the local companies and also the foreign companies that invest in Malaysia.

Pharmaniaga Logistics Sdn Bhd (formerly known as Remedi Pharmaceuticals) provides pharmacy management services. in Malaysia. it is a Page | 31 . The any decisions make by the government could affect the business strategy of the company. The price is cannot be manipulated by the sellers. The company operates through nine business units: Manufacturing. the government’s policy of tariff-free imports of pharmaceutical products.3. the bargaining power of buyers only will effect to the quality of medicine they produced. trade associations.6 Relative Power of Other Stakeholders The variety of stakeholder groups from the task environment are governments. For example. Pharmaniaga is one of the companies that provide the medicine supply to the government hospitals and clinics. and the price is lower than other distributors. and play competitors against each other. 5 Bargaining Power of Suppliers Suppliers can affect an industry through their ability to raise prices or reduce the quality of purchased goods and services. the bargaining power of buyers to effect in the industry is relatively medium. the purchasing power of the patients is low. Logistics. the licensing and the regulatory related to the medical and health issues. So that. special interest groups. the buyers are the patients. The company produces through Raza Manufacturing. local communities.Buyers affect an industry through their ability to force down prices. so that in this industry. bargain for higher quality or more services. In Pharmaceutical market. 3. Marketing. while its distribution unit. Solutions. the bargaining power of suppliers is low because it did not give a significant effect to the Pharmaniaga. creditors. the price for the medicine especially for the government hospitals and clinics is subsidized. unions. In the Pharmaceutical industry. In Pharmaceutical Industry. the government plays an important role in control the quality of medicines. so that. Pharmaniaga Biomedical and Esteem Interpoint. Pharmaniaga Diagnostics. So that. from manufacturing the medicines until distribute the medicines to their customers. shareholders and complementors. This is because it has its own comprehensive value chain management. Pharmaniaga do not face this problem. Pharmaniaga Research Centre.

So that.5 Markets.05 3. Identified biotecnology 3.2 0.35 market Middle Eastern Islamic 0.0 3. for geographical and strategic expansion  Economic  development Research and 0.10 3.30 Societal environment 0.15  development Promotion channels 0.4 Summary of External Factors EFAS table External Factors 1 Oppurtunities  Government  support Seek opportunities Weight Rating Weighted Comments 2 3 Score 4 5 0.0 0. 3. Different social-culture Page | 32 .60 Leader in pharmaceutical 0.15 4. the relative power of other stakeholders is high for Pharmaniaga.treat for the domestic company and need formulate a new strategy for this threat.05 2.125 Purchasing power of 3. online and newspaper Threats  Economic  0.48 patients increase.30 electronic media.0 0.15 unstable.10 0.0 0.5 0.10 instability Demographic trends 0.

Policies and procedures for all key processes are clearly documented and reviewed at regular intervals. Pharmaniaga LifeScience Sdn Bhd.00 3. ISO/IEC 17025 and OHSAS 18001. there are several functional lines. Pharmaniaga consists of four functional structures. which are generic pharmaceuticals. and Pharmaniaga Page | 33 . Divisional structure is appropriate for a large corporation with many product lines in several related industries. limits of authority and accountability is aligned to business and operations requirements in order to support the maintenance of a strong control environment.10 3.0 INTERNAL ENVIRONMENT: STRENGTHS AND WEAKNESSES (SWOT) 4. medical products and services. It consists of Pharmaniaga Manufacturing Berhad. logistic. Pharmaniaga Marketing Berhad.1 CORPORATE STRUCTURE A corporate structure with clearly defined lines of responsibilities. Pharmaniaga is a company that practice divisional structure. Employees tend to be functional specialists organized according to product or market distinctions.33 firms and new entrants Traditional medicines and product or services foreign pharmaceutical Government new industry Tariff free imports of policy Total Scores 0. In generic pharmaceuticals. The DAL is reviewed regularly to ensure that it continues to be relevant and effective.35 each countries Rivalry among existing 0.8 0.3 0.15 3. and others.5 3.10 0. Delegation of authority include authorization limits at various levels of management and matters requiring the Board’s approval are clearly defined under the Discretionary Authority Limits (DAL) to ensure accountability and proper segregation of duties. ISO 14001. Certain subsidiaries companies are certified under the carious standards such as ISO 9001.57 Pharmaceutical Product 1.555 4.   Competitors Substitute of 0. Pharmaniaga Research Centre Sdn Bhd. The business operations of Pharmaniaga are also governances by various regulations and laws applicable to the pharmaceutical and healthcare industry.

customer. For logistic. it includes Pharmaniaga Logistic Sdn Bhd and PT Millenium Pharmacon International Tbk (Indonesia) which is subsidiary of Pharmaniaga International Corporation Sdn Bhd. 4. Pharmaniaga now is adopts the Balance Scorecard quadrants (FCIO) to measure the KPIs achievements. A structured Performance Management System (PMS) which is linked to and guided by established Key Performance Indicators (KPI) and Key Result Areas (KRA) parameters has been implemented. committed and caring employees who are able introduce the products and services to customers. Pharmaniaga is a holding company for Pharmaniaga International Corporation Sdn Bhd and it also participate in associated company for Forte Tech Solution Sdn Bhd.2 CORPORATE CULTURE Corporate culture is the collection of beliefs. system and process improvement and image and perception management. Emphasis is placed on talent and competencies of employees through a recruitment strategy and continuous training and development. expansion and growth of business. Training and development needs Page | 34 . people and organization developments. which are financial. They have particular knowledge regarding to the pharmaceutical. expectations. PMS was driven by Pharmaniaga’s five-point focus value creation to support business unit and organization strategies. Medical products and services consists of Pharmaniaga Biomedical Sdn Bhd in which is a subsidiary of Pharmaniaga Logistic Sdn Bhd. The business unit provides a framework to translate and align Pharmaniaga’s strategy into measurable operational terms and was used as a business unit and organization performance measurable tool. It gives a company a sense of identity. The corporate culture generally reflects the value of founders and the mission of the firm. internal business process and organizational learning and growth. Besides the functional structure stated above. The present structures are consistent with current organization mission in which is to provide quality products and superior services by professional. This system has been implemented on employees at the executive and managerial level.Biovention Berhad. It included productivity of resources. It means that each different functional structure has its own professional. committed and caring employees. and values learned and shared by a corporation’s members and transmitted from one generation of employees to another.

Succession plan is also reviewed annually to ensure continuity at all critical positions. The review is based on performance reports which provide comprehensive information on financial performance and other key non-financial indicators. management processes and business activities. risks associated to environment and social responsibilities and retention Page | 35 . Organization provide handbook that contain the human resource policies and code of conduct is available to all staffs. In manufacturing sector. shortage of raw materials and changes in regulatory environment. impact of competition from other pharmaceutical players. Ongoing risk monitoring is conducted to actively review the economic conditions and its impact to the business and the effectiveness of risk mitigation measures. In addition. Recruitment and promotion guidelines within the organization are established to ensure appropriate people of caliber are selected to fill positions available. appraisals and other relevant procedures in place to ensure the employees are competent and adequately trained in carrying out their duties and responsibilities. Pharmaniaga also exposed to the economic conditions of the global economy. Through PMS. employees’ competencies are being properly addressed and suitable training programs or schemes identified to expand on the competencies. Pharmaniaga had expanded its market penetration strategy including overseas markets where Vietnam and Indonesia have been identified as priority markets. Induction programs are conducted for all new employees to ensure that they are immediately aware of the accepted code of ethical conduct and employees’ obligation and responsibilities under the Safety and Health policies. formal training program for staffs. There are proper guidelines within the organization for hiring and termination of staffs. operational review meetings are conducted on a monthly basis to review and monitor matters pertaining to the business operations. There are several risks inherent in the organization’s business operating environments in which include non-compliance to legal and regulatory requirements. The organization practices a holistic risk management since it offers a consolidated view of all types of risks and opportunities across the organization. Pharmaniaga’s risk management philosophy is to balance risk awareness and control with the need to create and exploit opportunities.of employees are identified to ensure employees are adequately trained and competent in discharging their duties effectively. market demand. All employees are required to renew their declaration of non-conflict of interest very year.

That is the reason why their dedicated sales teams are not only knowledgeable in the strategy on selling products but more important. they set out to foster long-lasting relationships with whomever they come into contact with. promotion and price. strong and motivate marketing team that has been formed is crucial in promoting and advertising their products and services. They demand the best product from their organization. 4. how is the best and when is the best for the sake of giving the best products and services to their customers or fulfill customers’ needs. place. marketing or information technology are offering value added to fulfill customers’ needs. These variables are product.3. Marketing mix refer to the particular combination of key variables under an organization’s control that can be used to affect demand and gain competitive advantage.of key personnel. be it their agents. they spend their time in researching what is the best. The members in Pharmaniaga are considering as consumer too. and want to render their world-class services globally and will continue their efforts to make Phamarniaga a household name in every corner of the world. Pharmaniaga’s members are aware that their action will affect their organization reputation. This is due to the fact that customers are used to judge a performance based on the whole value of the core product instead Page | 36 . In addition.1 Marketing Pharmaniaga marketing approach is driven by human behavior. Pharmaniaga assessed the risk of an adverse effect on its business operations arising from the above risks as low as the moment. customers or consumers. Pharmaniaga has the largest sales team among local generic healthcare companies which is beneficial and relevance in persuading and urging customers to make an order. Pharmaniaga is a medicine provider in which medicine is a core product while other supplementary services such as logistic. partners. They will not stop there.3 CORPORATE RESOURCES 4. In addition.

O. Pharmaniaga maintains a good price strategy since the reduced priced are reaching the final customer and not being absorbed by resellers in the marketing channel. urban and suburban to reach out to the mass.S) to provide related health information and advice to public. such as ‘Mesti Ambil Tahu’ (MAT) and Skuad Operasi Sihat (S. Page | 37 . Since Pharmaniaga has its own logistic department thus methods and channels to deliver have to be well decided. Pharmaniaga has successfully implemented their product strategy by adding value through welcomed enhancements. English and Chinese. At the same time. SOS extends basic health education. counseling service and medical check-ups to the general public. customers can keep away from bearing the higher prices as they are paying wholesaler prices instead of retailer prices. customers pay less but qualities of the products are assured and customers’ satisfaction can be increased. an alternative network has been designed to avoid network being jammed thus customers can make an order either through physical channels or electrical channels since both channels are reliable and easy to use. Pharmaniaga has organized several campaigns. Successful marketing programs rely on its effective communication. The road shows involve fun activities like quizzes on healthcare topic and the distribution of leaflets. MAT is a community projected that aims to increase public awareness to be more proactive in understanding health issues and the basics of healthcare. SOS is a mobile clinic that does not only perform health screening. Thus. Pharmaniaga also placed importance on corporate social responsibilities besides promotion and education. Customers can place their order through electrical channel since there is stable network to support and manage the customer order form. but also provides resources and establishes education and awareness for rural and marginalized populations in promoting a healthy lifestyle. This will enable Pharmaniaga to gain more profits as intermediate costs could be eliminated.of merely concentrating on a sole product. On the other hand. The leaflets are produced in three languages that are Bahasa Malaysia. The project mostly runs by doing road show to public places. As a result. Furthermore. Promotion and education play important roles to provide related health information and advice and develop strong relationship with customer through effective communication channels. At the same time. quizzes are also done over radio station.

The preparation of financial statements in conformity with the provisions of the Companies Act 1965 and Financial Reporting Standards. generally accompanying a shareholding of more than one half of the voting rights. irrespective of the extent of any minority interest. Subsidiary companies are fully consolidated from the date on which control is transferred to the organization and are de-consolidated from the date that control ceases. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. The excess of the cost of acquisition over the fair value of the organization’s share of the identifiable Page | 38 . Subsidiary companies are entities in which the organization has the power to govern the financial and operating policies so as to obtain benefits from their activities. the MASB Approved Accounting Standards in Malaysia requires director to make estimate and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. equity instruments issued and liabilities incurred or assumed at the date of exchange. The preparation requires the use of certain critical accounting estimates and also requires management to exercise judgment in the process of applying the organization’s accounting policies.4. plus cost directly attributable to the acquisition.3. The purchase method of accounting is used to account for the acquisition of subsidiary companies by Pharmaniaga. It is a public limited liability company. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the organization controls another entity.2 Finance Pharmaniaga is an investment holding company. The cost of an acquisition is measured as fair value of the assets given. incorporated and domiciled in Malaysia and listed on the Main Board of Bursa Malaysia Securities Berhad.

Pharmaniaga’s share of its associated companies’ post-acquisition profits or losses is recognized in the income statement and its share of post-acquisition movement within reserves is recognized in reserves. Investment in associated companies is accounted for using the equity method accounting and is initially acknowledge as cost. plant and equipment are stated at historical cost less accumulated depreciation and impairment losses. which is Pharmaniaga’s functional and presentation currency. When a foreign operation is sold. the exchange differences are known in the income statement as part of the gain or loss on sale. plant and equipment are depreciated on the straight line method to write off the cost of the assets to their residual values over their estimated useful lives. All the property. Disposal to the minority interests result in gains and losses to the organization that are recorded in the income statement. Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet. Subsequent costs are included in the assets’ carrying amount or known as a separate asset. Property. The consolidated financial statements are presented in Ringgit Malaysia. are taken to shareholders’ equity. as appropriate. Purchases of equity from minority interests result in goodwill.net assets acquired at the date of acquisition is recorded as goodwill. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. On consolidation. Freehold land is not depreciated as it has an infinite life. If the cost of acquisition is less than the fair value of the net assets of the subsidiary company acquired. While Income and expenses are translated at the average exchange rates and all resulting exchange differences are known as a separate component of equity in the organization. only when it is probable that future Page | 39 . Pharmaniaga applies a policy of treating transactions with minority interests as transactions with parties outside the organization. exchange differences arising from the translation of the net investment in foreign entities and the borrowing and other currency instruments designated as hedges of such investments. being the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary company. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. the difference is recognized directly in the income statement.

consultation. 4. The proven platform and talented employees will continue to achieve the productivity gains and provide value added services. Page | 40 . and is planning for 6 additional talents to strengthen its focus on the bio-equivalent and bio-similar segmentation. Furthermore.3. 4. Canada. it successful development scale-ups of products and speedier product development and promoted new products in the market faster in cost-effective manner is compared to the competitors. This approach that gears the organization towards multi-skilling and multi-tasking among them is crucial as the organization is the largest producer of pharmaceutical products in the country.3 Research and Development (R&D) In R&D sector. As a result. safekeeping. Pharmaniaga has invested an amount of money to investigate and plan for the best strategy for advance development. Pharmaniaga currently has acquired 22 research talents. such as improvements and reengineering of existing formulations and manufacturing processes. Pakistan and United Kingdom for its Product Development team.4 Operational and Logistics There are several flows of Pharmaniaga in providing its products and services to customers. Furthermore. In Research and Development (R&D) lab. The Quality Control and Research & Development Laboratories are accredited to the ISO/IEC 17025 Laboratory Accreditation Scheme. This strategy is aim to improve the dynamism of the organization through re-skilling and changing mindset among talents. Pharmaniaga takes initiatives to source talents from India. order taking. The flows are including information. Pharmaniaga advancing into new areas of biotechnology including biogenetics and potential drugs developed from local herbal remedies.3. hospitality.economic benefits associated with the item will flow to the organization and the cost of the item can be measured during the financial year in which they are incurred. exception.

customers’ satisfaction may increase since the organization is paying attention on their products safety and security. Pharmaniaga has been creating a strong marketing team to focus on promoting and providing relevant information for their customers. Page | 41 . The fifth step in providing products and services in Pharmaniaga is safekeeping. Pharmaniaga has been developing an effective consultation scheme to guide their customers in improving their relationship with the organization. accurately and timely. Furthermore. In the first step. Pharmaniaga able to provide such an environment since their employees are well trained and their systems used are in advance. The organization can handle the order fast. The second step in providing products and services in Pharmaniaga is consultation. Consultation strongly inspired in supplementary services. It will also increase customer loyalty indirectly when they have better understanding towards the products or services provided. Through safekeeping service. Service provider has to provide an ideal environment and procedure to attract new customers in this process. customers are likely to seek for information regarding to the products and services before making a decision. For example. well managed logistic system also help in increasing customers’ satisfaction because they save time and efforts while purchasing a product from Pharmaniaga. its products are reliable and have been certified and the organization has an efficiency logistic system that can deliver products to customers on time. Customers are more likely to get responses from the service provider especially when there is variety products or services which then to confuse them. The forth step in providing products and services in Pharmaniaga is hospitality.billing. On the other hand. Order taking will take place when customers decided to buy a product. In addition. Automated Storage and Retrieval System (ASRS) aim to store and remove inventory automatically since there is a low probability for the organization to make a mistake or delay customers’ order. customers can gain information easily through their website as well as words from mouth. billing and payment. On the other hand. This is because some new customers are lack of the related information so that precious advices are necessary to avoid misunderstanding about the product or service provided. Moreover. The third step in providing products and services in Pharmaniaga is order taking. Pharmaniaga’s products are well taken care in terms of packaging.

In logistics sector. In addition. When customer service order management (SCOM) had received the customer order through eordering. Employee Relation (ER) maintains employeremployee relationships that contribute to satisfactory productivity. Pharmaniaga is supplying their products to government or private hospital in large amount. Pharmaniaga design a guideline in advance to avoid unanticipated circumstances. ER also conducts activities to enhance the working relationship among employees with sports.5. social Page | 42 . Pharmaniaga has to control their account receivable and account payable in order to reduce overload debt. as long as the method is convenient for customers. The organization has prepared several billing methods. Pharmaniaga enhance its employees with several beneficial commitments. the product will be put at staging area for shipping to the destinations. Pharmaniaga is the leading Malaysian distributor of pharmaceutical and healthcare related products for local and foreign principle with a customer-based that include government hospitals. 4. Prioritizing the relationship within the organization. such as debit card and credit card or cash transfer. After products have been picked up.3. private medical centre. In addition. the organization is reliable for any mistake and compensate for lass damage or injury in serious cases. Pharmaniaga’s customers can make their order through Pharma*Net. they will send the order to the warehouse in picking out the product through Automated Storage Retrieval System (ASRS).The sixth step in providing products and services in Pharmaniaga is exception. The seventh step in providing products and services in Pharmaniaga is billing. Exception is a supplementary service that beyond the normal routine. pharmacies and private clinics. The last step in providing products and services in Pharmaniaga is payment. The organization has to handle as soon as possible if there is problem or complaints regarding to the services provided. Customers are expected to make payment once they received the billing notice. Human Resources Management (HRM) Pharmaniaga takes responsibilities to ensure that its employees are enjoying the welfare provided by organization. Besides that. billing details are completed with information on how total was calculated. motivation and morale. so it has to make their billing timely and effectively since convenient and easy billing methods are requested by customers.

the organization also establishes a Surau Committee. Organization security ensures that the security of personnel and property within the office compound. well-placed with mere contributors and some difficulties adjusting and issues employees with miss-fit. providing financial assistance to eligible employees with the guidance of Lembaga Zakat Selangor and reserving designated parking space to expecting mothers or employees with health problem. The welfare includes setting up of a Joint Consultative Council. The identified talents whoever they are in the organization will be ear-marked for advancement position and succession planning. The organization does not create any particular pools if talents make the management believes that talents exist across the organization. activities and events. At Pharmaniaga. Pharmaniaga believes in going for quality. In addition. The first perspective is related to individual performance using the balance scorecard with defined key performance indicators such as sales targets and the number of new products that can be developed and marketed within a specific timeframe. However. Furthermore. what. Pharmaniaga places lots of importance on Key Performance Indicators (KPIs) as a measurement in monitoring business performances. Their utmost aim is to equip people with competencies and knowledge on current trend so that employees can be versatile and flexible to economic changes. Employees at Pharmaniaga are categorized into four types. such as family day and dinner monthly. Pharmaniaga’s welfare establish to satisfied employees. where and how often to develop potential successor. The pharmaceutical industry in general is noted to be a rather economic recession proof Page | 43 . talent management is defined in two different perspectives. establishing Kelab Sukan & Rekreasi Pharmaniaga Berhad branches at every entity so that the organization can organize outings. which is high potential with the ability to take higher responsibility. promotable. Through KPIs. It manages the parking arrangement and traffic flow of vehicle in the office hours. organizing in-house employee relation activities.events and recreational activities. IR also prevents and resolves problems involving employees among the organization. The second perspective looks at the individual potential that is gauging leadership ability. when. Industrial Relations (IR) creates and establishes a harmonious working environment for employees. the last type employees are subjected to Performance Improvement Program (PIP) to improve their work performance and put them back on track. mobility to be relocated and behavioral characteristics. the organization able to identify who.

Pharmaniaga always strived to recruit the best talent in tern of capability and suitability to ensure that its selection provides the right talents for the tight positions. widen and expand their acquired skills technically and managerially. In addition. The organization also places o=importance on observable behaviors in the required values. There must be self-governance in the absence of enforcement to facilitate a democratic work environment. Pharmaniaga encourages its employees to build their multi-tasking skills. make them marketable within and outside the organization by branding one-s expertise as well as enhancing networking with as many strategic people as possible. the people who make targets materialized. it holds talent management as a top strategic priority of the organization. So. The organization benchmarks across industry with the aim to source best practices and becoming the employer of choice in order to keep itself up-to-date and current with human capital development globally. Pharmaniaga believes that talents must be all rounder and should be trained to acquire the essential skills of the ability to have a helicopter view of the business. it has the opportunity to participate in the cross-assignment exercise operated by Khazanah Nasional Berhad. such as integrity and how people consistently behave in the absence of the boss. Pharmaniaga emphasize on the mobility of talents where talents should be agile and multi-skilled to avoid being too specialized in one job. So. Pharmaniaga emphasize on people and talent optimization as its business niche and competitiveness rely more on people than having process in place. For the manager level. On the other hand. For example.industry. Pharmaniaga focus on building its bench strength and the ability to provide different opportunities to employees whenever they are available. it is important to identify talents to be sharpened. In addition. The courses are to nurture them towards top position of the organization in the future. Pharmaniaga embarks on an active Investor Relation (IR) program aimed at fostering Page | 44 . the organization records low attrition rate and does not have any regrettable loss of talents. Pharmaniaga is providing them with the leadership development program and skills development courses. Pharmaniaga considers effective communication with shareholders and investors as extremely important. This is because process can be fixed but these must also be flexible to people needs. Pharmaniaga is a Government-linked organization.

plants and factories. It provided a contact point for shareholders or customers on any issues concern. Information System (IS) Pharmaniaga has its own website. newsletter. This ordering method is easy for its customers to purchase products necessary. responding to email or telephone enquiries.3. investor resources. teleconferences. In addition. Pharmaniaga is an organization that applying online ordering. photo gallery. This website shares business overview. and organizing trips for investors to visit the organization’s warehouse. with full appreciation of the impact of sound governance on long-term corporate performance and optimal shareholders value. 4. The Managing Director or IR personnel is primarily responsible for all IR activities. catering to numerous requests for private meetings with investors and analysts.pharmaniaga. The organization is committed to maintain constructive relationship with shareholders in pursuing the highest standards of corporate governance practices throughout the organization. the organization website provides an excellent medium of communication and source of information to shareholders and the general public regarding to the annual report and media briefings. shareholders can receive up-to-date information through the website. A dedicated e-mail address is also available at wmaster@pharmaniaga. Pharmaniaga has communicated to investors and shareholders the solid of the Board and management.6.com. the organization website consists of latest financial results. Besides that. The activities include hosting. Furthermore.com.high quality dialogue as well as building credibility and trust with the broad envestment community. Furthermore. auguring well for the continuity of current and future business. which is www. Customers are order products online thus the organization’s employees will process the order as soon as possible so that the products can deliver to customers on time. investor presentation and news releases besides the avenue for up-to-date information of the organization. online catalogue and answer to frequently asked questions. E-ordering enables customers order their products online without visiting the outlets. Page | 45 .

Pharmaniaga needs to prescribe medication that generates higher returns to the organization compared to over-the-counter products that provide smaller profit margin. The organization emphasized on better quality of life thus providing products and services in an affordable level. The organization fully applied creativity and innovation into its marketing strategy which enable them to become a potential market leader. equipping and distribution. Pharmaniaga is able to control its production so that the organization can fulfilled customers’ demand without any products shortage. different field in the organization is responsible to achieve their mission and vision as well as objectives. Pharmaniaga is emphasizing in delivering value to its customers via superior quality products and services which is stated as the mission. However. medical planning. Pharmaniaga applies several electronically payment method. which is the essence of effective quality management. It puts a lot efforts and guidelines to achieve the desired mission. 4. information technology and research and development are meeting customers’ expectancy or exceed their expectation. The organization has to plan and launched for relevant strategies to make sure that Page | 46 . logistics. This is because the organization understands that different people tend to hold different perception and belief in decision making. In addition.In addition. marketing. The organization also invest into ICT to address the geographical and regional divide in the pharmaceutical business and being a leading pharmaceutical organization in the nation requires focus on people management for leadership accountability. Pharmaniaga has its own weakness that is it has to cover maintenance and operation costs. As a result. Pharmaniaga is growing rapidly in domestic as well as international market in which it has been internationally recognized as a healthcare solutions provider. cash transfer and debit card. such as credit card. These payment methods are an easy way for those customers who purchase expensive products and services.4 SUMMARY OF INTERNAL FACTORS Integration of manufacturing. The organization Quality Management System is certified to the ISO 1990 standard. This is proven by Quality Management System is maintaining at the excellent level without any deviation in production of quality products.

0 4.05  Marketing strategy Total Scores 3.5 4.33 3.125 budget Advance budgeted for new 0.10 0.05 oriented 0.00 3.0  Vertical integration 0.4 product Lack 0.10 1.10  management Potential   trained sales teams Products quality International and 0.0 3 0. IFAS table Internal Factors Weight Rating Weighted Comments Score 1 2 Strengths 4.525 Planned for maintenance 0.0 3.705 of a medical knowledge More on persuading Page | 47 .maximum capacities can be operated without wasting its organization resources.15 0.10 oriented Weakenesses  Maintenance costs  Financial position  Process  operational Pool of talents 0.3 0.6 0.15 4.2 market share Satisfied customers needs Larger pharmaceutical organization industry 0. In addition.3 reputation Increase 0.0  Leadership of top 0. the organization has to plan the budget for the maintenance costs since profitability is affected.5 3.05 4.5 2.15 0.4 Improve productivity Construct organization 0.15 products line Slow on processing 0.675 0.0 4 5 0.

As such. The following diagram shows how a SWOT analysis fits into an environmental scan: Page | 48 . The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities like Pharmaniaga to the competitive environment in which it operates. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W). The third classification of factors in the SWOT analysis is Opportunities.5. Strengths in the SWOT Analysis are attributes or characteristics within the organization that are considered to be important to the execution and ultimate success of the project.1 SITUATIONAL ANALYSIS SWOT analysis is referred to a scan of the internal and external environment is an important part of the strategic planning process. and those external to the firm can be classified as opportunities (O) or threats (T). it is instrumental in strategy formulation and selection.0 ANALYSIS OF STRATEGIC FACTORS (SWOT) 5. While weaknesses in the SWOT Analysis formula have to do with internal factors that could prevent the achievement of a successful result to the project. the final essential component for the SWOT Analysis is Threats. Here. This classification has to do with external elements that will prove helpful in achieving the goals set for the project. external factors that could threaten the success of the business venture or project are listed and addressed. Last.

Substitute of product or services T5. Economic instability T2. Promotion channels    W1. logistics. Leadership of top management S3. Research and development O5. Process oriented   operational W4. Government support O2. medical planning. information technology as well as research and development aid in meeting customers’ expectancy or exceed their expectation. Financial position W3. Integration of manufacturing. Demographic trends T3. Pool of talents W5. Products quality S5.1 Strength First strength of pharmaniaga is vertical Integration. Through Page | 49 . Maintenance costs W2. Economic development O4. marketing. Vertical integration S2. Competitors T4. International oriented Opportunity   O1.1. Government new policy 5. Better quality of life is emphasized yet affordable products and services are provided. Potential and trained sales teams S4.Strength      Weakness S1. Seek opportunities for geographical and strategic expansion    O3. Marketing strategy Threats      T1. equipping and distribution.

As a consequence.the integration. Quality Management System is maintaining at the excellent level without any deviation in production of quality products. knowing that their hard work and willingness to improve is helping to achieve a common goal. Third is potential and trained sales teams. they also can utilize a leadership management style to create a workplace environment where people feel like equals. Pharmaniaga understand their potential customer thoroughly. Their Quality Management System is certified to the ISO1990 standards. efforts and guidelines have been made or complied to achieve their desire mission. which is the essence of effective quality management. This is because Pharmaniaga always providing employees with numerous training and workshop to give them attain more wide knowledge like how to sales to customer. Hence. Tapping into the spirit of teamwork is one of the best ways to energize employees. Pharmaniaga is emphasizing in delivering value to their customer through superior quality products and services which is stated as the mission of their company. As a result. This is due to the fact that different people tend to hold different perception and belief in decision making. innovation and creativity are greatly applied into marketing strategy which enables them to become a potential market leader. which in turn make the business more profitable. how to retain existing customers and attract new customers to using Pharmaniaga’s products and services. Second strength is Pharmaniaga have a strong leadership of management. Through this training programmed. They are now able to plan the suitable marketing strategy to attract more customers to purchase their products and willing to use their services. Pharmaniaga is able to control their own productions thus demands from different level of customers can be fulfilled thus shortage of the products are reduced. Pharmaniaga has many capabilities leaders which are ability to inspire employees to overcome challenges and increase productivity. Thus. Fifth strength is international oriented. Fourth strength is products quality. how to build out friendly relationship with customers. Therefore. Page | 50 . different field is responsible to achieve their mission and vision as well as objectives of the company. Their employee who doesn’t feel like a subordinate is more productive and more open to constructive criticism. Pharmaniaga had fostering potential and professional sales teams. Besides that.

5. billing. Therefore. Pharmaniaga sometime wrong defined target customers and not have a clear marketing strategy which is a necessity for any business. safekeeping. budget for the maintenance costs have to be planned carefully since profitability is affected if maintenance costs are not spent accordingly Second of the weakness is financial position. consultation. It Page | 51 . relevant strategies have to be planned and launched to make sure that maximum capacities can be operated without wasting their resources. This weakness will make Pharmaniaga lost bigger profit.2 Weakness First of the weakness is maintenance costs which related to the high costs that Pharmaniaga has to cover such as maintenance and operation costs. Forth is pool of talents. Companies tried to reach the break-even point in order to gain profit when sufficient products are supplied to meet the customers’ demand for a particular product. As a result. hospitality. they can’t observe some projects in different perspective and cause Pharmaniaga loss the profit and low performance. it is a challenge for Pharmaniaga in maintaining profitability associated with a fluctuating rate16. Pharmaniaga is providing its products and services to customers. They not much emphasize whether these person talent or not or are they suitable to hold this position in the department. This is because a clear marketing informs us what products will sell and how to sell them. Fifth of Pharmaniaga’s weakness is marketing strategy. Third weakness of Pharmaniaga is Process oriented operational.Pharmaniaga is growing rapidly in domestic as well as international market in which it has been internationally recognized as a healthcare. However. exception. Moreover. This is due to the fact that excess demand or excess supply may affect the profitability of a company. poor talent of employees consider of planning the projects just in their own perspective.1. Pharmaniaga is careless on balancing state in the demand and supply of a product. order taking. The flows are including information. billing and payment. Automation and analysis of Pharmaniaga recruiting and hiring processes provides the immediate workforce visibility and insights that they need to significantly improve their bottom line. Because the flow and the step is more complete so it will become Pharmaniaga’s weakness when they rush to complete their products.

successful scale-ups of products and speedier product development can be developed and new products can be promoted in the market faster in cost-effective manner as compared to their competitors.dictates important budgeting and long-term planning decisions.1. they have the opportunity to expand their businesses into other Asian countries and USA. As a result. Vietnam and China. Therefore. television. radio. government cooperate with Pharmaniaga promote the biotechnology industry in order to attract foreign investment. exhibition and sport events. Third of the opportunity is economic development. For example. The last of the opportunity in Pharmaniaga is promotion channels. and so on. With the rapid growth and development. reduce Pharmniaga‘s finance problems and expand to other country. This opportunity allows Pharmaniaga produce different product. Government also provide leadership development program and skills development courses to Pharmaniaga’s employees. It means they can afford to buy products even if prices are negotiable rather expensive. Other than that. As a result. As a result. Indonesia. Besides. Pharmaniaga also offer sponsorship in some entertainment programmed include concerts. Forth of the opportunity is Pharmaniaga invest a lot of efforts in research and development field in which an amount of money spent to investigate and plan for the best strategy for advance development.3 Opportunity First of the opportunity in Pharmaniaga is government support. Pharmaniaga has Page | 52 . Pharmaniaga needs try to avoid these problems from happen again. with the sector already showing dynamism. internet. Since Pharmaniaga has operating warehouses in 36 sites across 4 countries which is Malaysia. 5. efforts to increase their productivities and improving profitability must be realized since this is a golden opportunity for Pharmaniaga to expand their strategies and businesses worldwide. So. because at that time customers have a high purchasing power. Government gives subsidiary to Pharmaniaga. Pharmaniaga had successful implemented effectiveness promotion through mass media such as newspaper. it allows companies to make high profits and subscriber rate is raise. It affects how many employees that need. Second of the opportunity in Pharmaniaga is seek opportunities for geographical and strategic expansion. Besides that.

As a result. they will always think carefully in all aspects before create out new products to market. 5. Forth threat to Pharmaniaga is substitute of product or services. Due to exist many competitors. and in consumer lifestyles and behavior will affect buying patterns. it also will stifle innovative and creative thinking among employees. Although Pharmaniaga has become a potential market leader in Malaysia but they still have to compete with other competitors in order to strive and attain their goal. Pharmaniaga needs to experience many procedure Page | 53 . However. If the situation happen continuous. Malaysia just will use or accept to buy the ‘halal’products. Second threat is demographic trends.1. For example.4 Threats First of the threat in Pharmaniaga is economic instability. Third threat of Pharmaniaga is exists many competitors. it will reduce the company's sales and consumer’s loyalty to our products. Government policy maybe more strict barrier to get entry in this field because the health issues are important to all the people so that licensing requirements is difficult to get it. Pharmaniaga can’t expect when the economic status is occur. many of them try to counterfeit Pharmaniaga’s products and sell in a lower prices to consumers. This situation occurs because related to different society and social structures. This will indirectly help to promote their brand. The last threat of Pharmaniaga is government new policy. Pharmaniaga may view this as a challenge to improve their company’s performances. it make challenges to Pharmaniaga because it needs to do more research to this ‘halal’ ingredient that they didn’t try it before. it will cause the company lost profit that we can’t expect it. So. Low price strategy has attracted many consumers to buy their products. Besides that. so it mean Pharmaniaga will lost a big profit especially if economic instability. It is because if the product failure in market.provided scholarship for students as one of their promotion method. Changes in the structure of the population. This is because economic can change in a vary conditions which it can develop and also may experience a severe recession. So. This is a challenging as well as threatening task for Pharmaniaga since customers are more likely to compare the similar products with respect to the different price and quality offered.

This situation will disturb or delay whole of the company’s operation.0 0.0 0.35 X X 0.15 3.0 0.5 0.53 X X O4 Research and development 0. Long steps and complex procedures make Pharmaniaga can’t expand their market to other country easily.15 Rating 4.32 X X X Comments Improve productivity Satisfied customers needs Planned for maintenance budget Lack of medical knowledge leader in the pharmaceutical market through local manufacture.40 X X 0.10 4.5 0. The SFAS (Strategies Factors Analysis Summary) Matrix is summarizes on Pharmaniaga’s strategic factors by combining the external factors from the EFAS table with the internal factors from the IFAS table. joint ventures and product launches identified biotechnology Page | 54 .30 X X W1 Maintenance costs W4 Pool of talents 0.10 3.0 Weighted score 0.before approve by government.10 3. impose tax by government will also increase the financial burden of Pharmaniaga.10 4.40 X X O1 Government support O2 Seek opportunities for geographical and strategic expansion 0.60 0. Furthermore.2 0. SFAS TABLE 1 2 3 4 Duration S H O R T I N T E R M E D I A T E 5 6 L O N G Strategy factors S1 Vertical Integration S3 Products quality Weight 0.10 3.

33 T5 Government policy Total cost 0. Pharmaniaga is guided byits philosophy of ‘doing business with a conscience’ and empowered by its mission of enriching life together.8 0. Page | 55 .Pharmaniaga mission is to be the preferred brand in healthcare in the market we choose to serve and the Pharmaniaga mission is to deliver maximum value to our customer through superior quality products and services by committed professional and caring employees.61 5.00 X X X X The rate of the industry growth become more slower tariff free imports of Pharmaceutical Product 3. contributing significantly to improving wellness of people by providing high quality products and services. With a vision to be the premier Malaysian pharmaceuticals company.2. or the patients who benefit from Pharmaniaga products and services. 5. and will continue to be part of Pharmaniaga's philosophy of doing business with a conscience.2.10 3. customers.T3 Competitors 0.2 Current objectives Pharmaniaga is driven by its goal to enrich the lives of all those that it comes into contact with.38 1. Already operating in 38 sites across 3 countries (Malaysia. Indonesia & Vietnam) the Pharmaniaga Group is poised to be a regional player in the international pharmaceuticals arena. "Mesti Ambil Tahu" is testimony to Pharmaniaga's commitment towards enriching life together. be it its own employees.10 3. .1 Current Mission Pharmaniaga is one of UEM subsidiary company and a public listing company in the Main Board Bursa Malaysia Securities (BMS) with the mission is to be Malaysia's foremost integrated healthcare solutions provider. partners.3 0.2 REVIEW OF DIRECTION 5.

Page | 56 .