Chief executive officer’s review
Since assuming our current name in mid-006 to reflect being part of the CCM Group, the Company has gained greater recognition through the Group identity and has been given an excellent rating from preferred suppliers. The integration of people and systems with those of the Group proceeded smoothly and, for the first time, we adopted CCM’s Key Performance Indicators for its pharmaceutical business for the year 007. These included:· Growing our share of the domestic market, especially · Increasing our business to the government sector · Launching new innovative products.
For the year under review, we have achieved an increase of about 8% in our production output and approximately 0% in our sales. We are in line with industry growth of 8% to 0%.
Growing the business
Since 005, the Malaysian Government has been
using methadone in Drug Substitution Therapy [DST]
programme as part of its harm reduction therapy for
heroin addicts. Methadone has been used globally for
40 years with a high level of efficacy and the Malaysian
Government was able to achieve a 90% success rate
in its pilot project. Administered orally, it has minimal
side effects and reduces withdrawal symptoms. This
prompted the Government to place 5,000 more heroin
addicts under the Methadone DST programme in 007.
CCM Duopharma had won the tender to supply methadone to the Ministry of Health [MOH] in 006. With the Government extending its programme, we will continue to supply to the Government until 009. 09.05.2007
CCM Duopharma participates in Group’s
innovation programme
Chemical Company of Malaysia Berhad [CCM] launched its Year of
Innovation at the office of CCM Duopharma Biotech Berhad. The event
was officiated by the Group Managing Director, Dato’ Dr Mohd Hashim
Tajudin, and was attended by managers from various subsidiaries and
regional offices.
The 007 Year of Innovation is aimed at inculcating a quality-driven and innovative culture and workforce within the Group. This is in line with the aspirations of CCM Duopharma to remain competitive and become a leader in the industry. Innovation plays an important role in a company’s quantum leap in business to gain higher growth. According to Dato’ Dr Mohd Hashim, the innovation culture in CCM must be across the board. Innovation must be looked at and addressed from all angles on products, processes as well as services provided to customers internally and externally. The Group also launched an Employee Innovative Suggestion Scheme [EISS] to encourage and promote outside the box and innovative thinking and ideas among all employees. The DST programme helps heroin addicts to control A Customer Awareness Team [CAT] was set up in 007 their addiction and lead a normal life, enabling them to to create customer awareness of our OTC products re-enter society in a productive manner. To familiarise through health-related activities. CAT also served to medical practitioners with the programme and dispel strengthen our on-going advertising and promotional notions of its efficacy, we sponsored the Methadone campaign as well as complement our sales and marketing Maintenance Therapy Workshops organised by Pusat initiatives. Activities that included health screenings and Perubatan Universiti Malaya. Endorsed by the MOH, product samplings were held at more than 9 chain and the workshops were held on 3 May and  November independent pharmacies around the Klang Valley. Visits during the year under review. The programme also drew were also made to a number of hospitals. attendees from non-governmental organisations. Already exporting our products to about 0 countries, The government sector is an important market for us. our strong presence in the ASEAN region has helped us We were awarded a contract to supply 63 items to the to post double-digit growth in export sales for the year MOH for the period 007 to 009. This tender award, under review. We, through the CCM Group, maintain worth approximately RM30 million a year, is in addition sales offices in Bangkok, Ho Chi Minh City, Jakarta, to one that we had won in 006 to supply SLN 30 and Manila and Singapore, and have appointed agents in SLN 40 tablets to the Ministry. We are the only company in Malaysia permitted by the patent holder to produce these 3-in- anti-retroviral drugs that are used to treat About 0% of our business is attributable to exports, a ratio that we plan to increase by penetrating new markets in the Middle East and Africa as well as exploring While the main driver of our business is the small volume opportunities in Central Europe, Central Asia and the injectables, we continue to enhance our range of other South Pacific. Towards this end, we participated in trade products. In 007, two new ethical products, i.e. Precose exhibitions in Kazakhstan, Vietnam and Indonesia.We also and Nordipine, were introduced; these are products that took part in a trade show in USA and an international require prescription by medical doctors. Two new OTC trade show in Malaysia. At the same time, we are also products were also launched during the year – Legarin, tapping into the CCM Group’s distribution network to a herbal remedy that can help improve the liver’s ability to detoxify and burn fat in the body, and Donna Forte 500mg, an extension of Donna 50mg that was We are committed towards expanding our range with developed to help reduce discomfort and pain among new innovative products, as reflected in our target to invest an approximately 3% of revenue annually towards research and development [R&D]. As part of the CCM We will also see an addition of about 30 new products to Group, we are leveraging on the R&D services provided our range as a result of the acquisition of the assets and by Innovax Sdn Bhd, a subsidiary of Chemical Company brands of Malayan Pharmaceutical by the CCM Group. of Malaysia Berhad. Its cutting-edge facilities give us a Products such as Chewies, Cosmos and Milidon will be competitive advantage, providing us with a pipeline of ethical and OTC products that will address new health concerns. We have identified an increasing demand for haemodialysis and irrigation solutions and will expand our resources towards helping those affected in managing these conditions.
Improving quality
Time and again, we have contributed supplies of our Our membership in the CCM Group has brought us under products to help certain sectors of the community. During the umbrella of the Group’s Total Quality Management the year under review, we pledged a year’s supply of programme. Quality Improvement Teams [QITs] were Donna Forte 500mg, a product to alleviate the symptoms formed during the year under review followed by the of osteoarthritis, and other related products to the aged launch of the QIT Awareness Campaign on  March 007. residents of Penjagaan Warga Tua Sri Tanjung, Kuang, Selangor. This is not a one-off affair as we are in constant Participating in the CCM Group QIT Convention for the communication with the retirement home to help it in its first time on 6 September 007, our teams succeeded in taking home three of the five Special Category awards – Most Innovative Team, Best Use of QCC Tools and Developing our human capital
Techniques, and Best Presentation. In addition, we won Our emphasis on quality goes hand-in-hand with our the Gold in the Services as well as the Marketing and ongoing commitment to human capital development. Sales categories, and the Silver in the Manufacturing This has been further strengthened by the harmonisation of our human resource policies and procedures with the CCM Group. Our compensation and benefits are being We have also won recognition from outside the Group aligned with that of the Group, particularly in regard to for the quality and efficacy of our products. In the Guardian its performance-oriented philosophy, so that our vision, Choice Customer Awards for 007, we were the winner mission and strategic plans reflect that of the Group’s in the Joint Relief category. Encouraged by all these achievements, we plan to leapfrog our quality drive Performance-based tools, such as the Balanced Score Card and Key Performance Indicators, are being implemented Helping the community
to measure competencies and performance. Succession Being part of a conglomerate such as CCM has created planning is being introduced at top and middle greater awareness of our responsibilities as a corporate management levels to ensure continuity and provide citizen. In December 006, during the launch of Diamelon, a definite career ladder to retain our talents. The a product that is able to help control blood glucose levels, effectiveness of such initiatives, which require critical we had made a pledge to donate 50 sen to the National statistics and accurate data relating to human resource, Diabetes Institute [NADI] from the proceeds of the sale of is ensured by further improvements in our human every bottle of the product. During that launch, we had resource information system and processes. donated RM5,000 to NADI for the Institute’s educational programmes. On 4 November 007, we carried through To promote harmonious employer-employee relations with our promise, donating an additional amount of and minimise disputes, we organised industrial relations RM7,000 to the Institute at a presentation ceremony training, provided effective disciplining and counselling held in conjunction with ‘World Diabetes Day’. processes, and introduced grievance-handling procedures. Our support of NADI represents the first of several initiatives in our Corporate Social Responsibility The knowledge and skills development of our people programme. We are committed towards promoting remained high on our priority list during the year under greater public awareness on diabetes prevention. NADI review, with staff at all levels undergoing training in both was selected as the beneficiary of our programme to technical areas and soft skills. Developmental activities recognise and appreciate its efforts in educating the were undertaken to prepare them for the operational, public on diabetes. In further support of the Institute’s technical and individual requirements to support our work, we have also provided a link to its website via our expansion and growth. The Personal Effectiveness own corporate website. This should help to facilitate Programme was held for management staff to help access to information for people living with diabetes and them in moving towards the Group’s organisational culture. While most training and development is now held at the Group level, more specific training in Good Manufacturing Practices as prescribed by the MOH is organised at the manufacturing floor. 16.05.2007
At the K IHE 2007 Exhibition
CCM Duoph arma Biotec h Berhad partici pated in The exhibition provided CCM Duopharma a one of Cent ral Asia’s big gest internatio platform to establish business contacts into new exhibition, t he Kazakhst an Internationa l Healthcar e markets, gather market information and study nforce the competitors’ activities. More importantly, the exhibition gave the Company an opportunity to showcase its products, which included a wide range of small volume injectables and over-the-counter by 30% incr ease from th e previous year. Looking ahead
We will continue to face challenges brought about
by rising raw material costs and competitive imports.
Our main chal enge wil be in developing a strong
management team with a strategic outlook, one that
is also capable of revamping the organisation in
accordance with the Government-linked Companies
Transformation Programme, which wil bring us on
par with the multinationals.
Our immediate focus will be on expanding our facilities, not only with additional manufacturing and warehousing facilities but also with better staff amenities, at our plant in Klang, Selangor. We will be expanding our packing line for small volume injectables to improve output. In terms of our market, we succeeded in obtaining our Halal certification for a range of products in early January 008, which will pave the way for inroads into the Middle East. For the medium-term, we will be looking at further incorporating our operations into the Group’s divisional strategy by rationalising our product range. Having completed our second year within the CCM Group, the integration work is almost done and the emphasis would now be on gearing up our business. We operate in a resilient industry that caters to the health and well-being of the general public. As such, we expect our future prospects to continue being robust. Leonard Ariff bin Abdul Shatar
Chief Executive Officer

Source: http://duopharma.com.my/investorRelations/pdf/annual_report/2007/ceo_review.pdf

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