The government is planning to scrap permits for the import of secondhand machinery in a move aimed at supporting locally made machinery and to help save energy, an Industry Ministry senior official says.
Industry Ministry director general for metal, textile, machinery and miscellaneous industries Ansari Bukhari said Tuesday he would draft a revision to the 2007 Trade Ministry regulation on secondhand machinery imports.
He said the regulation, which is subject to an annual review, would expire effectively on Dec. 31 this year.
"Imports of used machinery should be banned because such machines consume 15 percent to 20 percent more energy than the latest versions and energy is really an issue in this country."
"Furthermore, allowing such imports means we are not supporting development of our own local machinery industry," said Ansari, adding, however, that the ministry would look into specific types of machinery in relation to the ban.
He believed only a few manufacturers could purchase "costly" machinery to meet their production targets and that most imported machines were not manufactured locally.
According to Indonesian Machine and Tool Industry Association chairman (Asimpi) Dasep Ahmadi, imports of machinery and components amounted to a total of US$8 billion and $5 billion, respectively, last year.
Ansari said the value of imported secondhand machinery amounted to between $1 billion and $2 billion last year.
The Central Statistics Agency recorded $7.44 billion in machinery imports during the first half of this year, more than double the $3.58 billion recorded in the same period last year.
The agency also indicated that Indonesia exported $1.95 billion worth of machines during the first half of this year, up by 21 percent from the $1.61 billion recorded in the same period last year.
Ansari said secondhand machinery was imported by almost all industries and sectors, including textiles, energy, footwear and food and beverages.
He said companies operating in these sectors reconditioned the imported machines to obtain better performance at lower prices.
The association has encouraged the import restriction because it was becoming too risky for companies to purchase such machines, particularly secondhand computerized machinery.
"Around Rp 250 million is needed to buy a *typical* second-hand machine and an extra Rp 15 million for repairs. However, there is no after-sale guarantee," he said.
"Meanwhile, we only need to spend Rp 350 million for a new machine, but with a full guarantee for two years," he added.
He said the government should provide incentives for those willing to purchase new locally manufactured machinery to support local industry.
In the meantime, the Industry Ministry machinery director Chanty Tirharso said sales of local machinery producers were likely to only reach 80 percent of the $12 billion target projected for this year due to the impact of the global economic slowdown.
"The global slowdown has caused delays in numerous infrastructure projects which need productive machinery," he said.