Govt to introduce stimulus for component makers<\/p>\n
Rendi A. Witular, The Jakarta Post, Tangerang<\/p>\n
The government is considering introducing another stimulus
\npackage this year to lure foreign component makers into the
\ncountry to support the development of the country's manufacturing
\nindustries, such as the electronics and automotive industries.<\/p>\n
Minister of Industry and Trade Rini M.S. Soewandi said on
\nThursday that the government would cut the country's dependence
\non imported components and as such encourage electronics firms to
\nproduce high-tech products and automotive manufacturers to expand
\nor open plants in the country.<\/p>\n
\"We are considering offering a stimulus package to investors
\nwho are engaged in making components to lure manufacturing
\ncompanies to invest in the country,\" Rini said.<\/p>\n
Rini's plan was voiced on the sidelines of the inauguration
\nceremony of the expansion to the manufacturing plant of PT LG
\nElectronics Indonesia (LGEI).<\/p>\n
Recently, the government has launched a stimulus package which
\nincludes the elimination and reduction of luxury tax on some 45
\nproduct items, mainly electronics, to help reduce their
\nproduction costs. This in turn will enable them to compete with
\ncheaper smuggled products.<\/p>\n
Rini said the ministry had currently set up a team tasked to
\nstudy the kinds of stimulus packages suitable for component
\ninvestors.<\/p>\n
The team, said Rini, consists of officials from her ministry
\nand the Directorate General of Taxation and the Directorate
\nGeneral of Customs and Excise.<\/p>\n
The stimulus packages, said Rini, could include the reduction
\nor even exemption of import duties and taxes on raw material
\nneeded by the component manufacturers.<\/p>\n
Furthermore, the government would also plan to build more
\nbonded zones that offer attractive facilities and incentives for
\ncomponent manufacturers.<\/p>\n
Analysts have said many giant automotive makers have been
\ndiscouraged from opening assembly or manufacturing plants in
\nIndonesia because Indonesia does not have a strong component
\nmanufacturing industry to support their production.<\/p>\n
The electronics industry has also been discouraged from
\nproducing high-tech products due to the absence of high-tech
\ncomponent makers in the country.<\/p>\n
To lure component makers, Rini plans to visit Japan this month
\nto meet with the country's microchips and dynamo producers and
\nconvince them that Indonesia is a good place for investment.<\/p>\n
President Director of LGEI Young Ha Kim agreed that Indonesia
\nshould strengthen its component manufacturing sector in order to
\nencourage more electronics makers to come to the country and the
\nexisting producers to make high-tech products.<\/p>\n
He said Indonesia was still attractive for investment and LG
\nwas still committed to investing in the country, which was
\nevidenced by the company's decision to expand its refrigerator
\nmanufacturing plant in Legok, Tangerang, Banten.<\/p>\n
LGEI produces TVs, refrigerators, VCRs, air-conditioners and
\nwashing machines in Indonesia.<\/p>\n
He said the local content of its products had thus far reached
\nbetween 60 percent and 70 percent. The company expected to boost
\nits local content by up to 90 percent in order to lower their
\nprices.<\/p>\n
The company invested US$9 million to expand its refrigerator
\nplant to meet increasing demand from the local and international
\nmarkets, he said<\/p>\n
The company's refrigerator exports increased by 100 percent
\nfrom 50,000 units in 2001 to 100,000 units last year. This year,
\nLG has an export target of 300,000 units.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-introduce-stimulus-for-component-makers-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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