Electronic makers see little room for price increase<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
Following the government's utility price hikes, local electronic
\nmanufacturers will limit the increase of the price of their
\nproducts to between 5 percent and 10 percent, according to an
\nindustry official.<\/p>\n
The chairman of the Association of Indonesian Electronics
\nProducers (Gabel), Adhi Sukmono, said on Monday that industry
\nplayers would soon meet to discuss what impact the price hikes
\nwould have on production costs, but added that producers would be
\nextra careful in deciding the increase to their products' prices
\namid consumers' weakened purchasing power.<\/p>\n
He also said that fuel and electricity expenses contributed
\nonly a little to overall production costs.<\/p>\n
He said that about 80 percent of the production cost was
\nlinked to imported components, which means that fluctuations in
\nthe exchange rate of the rupiah to the U.S. dollar would have a
\nlarger impact on cost.<\/p>\n
"We are still calculating the impact (of the utility price
\nhikes) on our production cost," Adhi said.<\/p>\n
"Our main concern is the rupiah's stability against the U.S.
\ndollar as most components are still imported and it would
\ninfluence the price of electronic products," he added.<\/p>\n
The government raised fuel prices as well as electricity and
\ntelephone rates. Protests are growing over the new policy as it
\nputs a greater burden on people and could cause production costs
\nto soar. There are fears the protests could escalate and cause
\nsocial unrest and political chaos, while putting further pressure
\non the rupiah.<\/p>\n
Elsewhere, Adhi warned that if the country's security
\ncondition worsens because of the protest, electronic
\nmanufacturers could not develop their businesses here.<\/p>\n
"And as a result, more illegal electronic goods will flood
\ninto the country, and we will be left out," he said.<\/p>\n
The electronics sector employs thousands of workers.<\/p>\n
Adhi added that local manufacturers would be hesitant to prop
\nup electronic prices because of the massive influx of cheaper
\nsmuggled goods into the country.<\/p>\n
"We are facing complicated problems," Adhi said.<\/p>\n
Electronic manufacturers have repeatedly called on the
\ngovernment to boost antismuggling efforts to help locally made
\ngoods compete on the local market.<\/p>\n
They also urged the government to review the tax on electronic
\ngoods, which has curbed the growth of electronic producers.<\/p>\n
Up to 52.5 percent in tax is levied on electronic goods sold
\nin the country.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/electronic-makers-see-little-room-for-price-increase-1447893297",
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"sponsor": "Okusi Associates",
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