Electronics industry looks for investment<\/p>\n
JAKARTA (JP): Indonesia needs more investment in the
\nmanufacture of electronic components to strengthen the structure
\nof the country's electronic industry, Minister of Industry and
\nTrade Tunky Ariwibowo said yesterday.<\/p>\n
Tunky said in a written speech at an electronics seminar here
\nyesterday that Indonesia wants to develop a competitive
\nelectronic industry with a strong base of locally-built
\ncomponents.<\/p>\n
\"The policy for developing the electronics industry in
\nIndonesia encourages the multi-sourcing of components... which
\nwill result in competitive products with high local content,\"
\nTunky said at the seminar, conducted by the Indonesian Electronic
\nIndustry Association to coincide with the visit of 36 executives
\nfrom electronic vendors in Nagano, Japan.<\/p>\n
The Nagano investment mission here is a counter-visit to the
\nIndonesian electronic industrial tour, led by Tunky, to Nagano,
\nJapan, in November last year.<\/p>\n
Tunky noted that the electronic industry is expected to become
\none of the country's largest foreign exchange earners within the
\nnext few years. By the end of the current five-year development
\nplan, in March 1999, electronics exports should contribute US$6.5
\nbillion or 11 percent to Indonesia's total exports, Tunky said.<\/p>\n
Last year, Indonesia's exports of electronic goods totaled
\nUS$2.9 billion, representing a 13.4 percent increase over the
\n$2.6 billion in the previous year.<\/p>\n
Indonesian electronic goods exports are mainly TVs, radio
\ncassette recorders, video-cassette recorders, and car-audio
\nequipment.<\/p>\n
Imports<\/p>\n
Such high export revenues from electronics, however, did not
\ncontribute much to Indonesia's balance of trade as most of the
\nexport earnings were used for electronic component imports, which
\nstood at $2.3 billion last year and $1.9 billion in 1994.<\/p>\n
These electronics imports mostly consisted of components such
\nas TV tubes, capacitors and integrated circuits.<\/p>\n
Currently, Indonesia imports some 30 percent of its electronic
\ncomponents from Japan and the remainder from Thailand, Taiwan and
\nMalaysia, where most component manufacturers are also Japanese
\nand U.S. companies.<\/p>\n
Tunky said Japanese investment in electronic investment here
\nhad increased by 14.8 percent per annum during the 1991-1995
\nperiod -- from $215.2 million in 1991 to $374 million last year.<\/p>\n
Uripto Wijaya, chairman of the electronic industry
\nassociation, said that his association, in cooperation with the
\ngovernment, plans to establish an electronic component industrial
\nestate to persuade more component manufacturing plants to
\nrelocate from abroad.<\/p>\n
The planned industrial estate in Cikampek, West Java, will
\nrequire an investment of Rp 150 billion (US$66.6 million).<\/p>\n
Uripto further explained that 11 electronics companies from
\nNagano had signed memoranda of understanding with Indonesian
\npartners to establish joint-venture manufacturing facilities on
\nthe estate.<\/p>\n
\"Eight of the 11 vendors will soon set out their investment
\nplans,\" Uripto said.<\/p>\n
Meanwhile, Fadel Muhammad of the Bukaka Group said that the
\nindustrial estate must be competitive in terms of land prices so
\nthat it will truly become a special estate for the electronic
\ncomponent industry.<\/p>\n
He said his group, which focuses on engineering and
\nmanufacturing of heavy equipment, would also enter the electronic
\nindustry, in cooperation with a Korean firm. He did not disclose
\nthe name of the firm. (rid)<\/p>",
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