P&G leaving RI, experts lament govt inaction<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
U.S. consumer goods giant Procter & Gamble plans to close down in
\nJuly its only remaining factory leaving hundreds unemployed as
\npart of a restructuring program of the group's operation in
\nSoutheast Asia, president PT Procter and Gamble Indonesia (P&GI)
\nRaul T. Falcon said.<\/p>\n
However, industry leaders said this was further disturbing
\nevidence that the country was losing out against its neighbors in
\nattracting foreign investment due to the continued unfavorable
\nbusiness climate here.<\/p>\n
Falcon told The Jakarta Post on Monday that about 230
\nemployees of the plant, mostly technicians and managers, would
\nhave to be laid off.<\/p>\n
He declined to provide details about their severance packages.<\/p>\n
The Jakarta Stock Exchange-listed P&GI currently operates a
\nplant in Bekasi, West Java, producing healthcare products under
\nthe brand name of Vicks.<\/p>\n
Falcon said that after the facility was closed down, the
\ncompany would outsource the production of the Vicks health care
\nproducts to local company Darya Varia Group to cater to local
\ndemand.<\/p>\n
He, however, could not provide details on the future role of
\nP&GI. P&G also has a distribution company called PT Procter and
\nGamble Home Products Indonesia, the fate of which is still
\nunclear.<\/p>\n
The company shut down its haircare products manufacturing
\nplant in 2000, and relocated to Thailand, which has become the
\ngroup's hub for the Southeast Asian region.<\/p>\n
\"We plan to consolidate our plants so that we can provide
\ncentralized manufacturing facilities for the region. This is part
\nof our restructuring program until 2005 in a bid to make our
\noperation more efficient and competitive,\" said Falcon.<\/p>\n
He played down suggestions that the relocation of the plant
\nwas caused by the worsening investment climate in Indonesia.<\/p>\n
He explained that P&G's decision to make Thailand its hub for
\nhaircare products and the Philippines for its healthcare side was
\nbecause supporting companies for raw materials had already been
\nestablished in those countries.<\/p>\n
But experts said that P&G made the move to take advantage of
\nthe Asean Free Trade Area (AFTA), which has slashed import
\ntariffs among the Southeast Asian members to between zero and 5
\npercent to boost trade. This means that exporting products from
\nThailand to other countries in the region would be relatively
\nfree of import tariffs.<\/p>\n
The selection of Thailand as P&G's hub in the region clearly
\nindicated that the investment climate and economic infrastructure
\nare much more attractive compared to Indonesia.<\/p>\n
Last year, Japan's Sony Corp. relocated its audio equipment
\nmanufacturing plant from Indonesia to neighboring Malaysia.<\/p>\n
Chairman of the National Economic Recovery Committee (KPEN)
\nSofjan Wanandi said P&G's decision was another harsh blow for the
\nIndonesian economy.<\/p>\n
He said that the hard-earned stability in some macroeconomic
\nindicators failed to encourage new investment.<\/p>\n
Sofjan criticized the government for being too slow in
\nresolving the persistent problems encountered by investors
\nincluding illegal fee demands, poor implementation of the
\nautonomy law, security problems and the absence of a credible
\nlegal system.<\/p>\n
\"Investors are now tired of it all, they tend to just pull out
\nfrom the country. As you see, all of their complaints have
\nremained unresolved for a long period of time due to the lack of
\nintegrity and commitment among government officials,\" said
\nSofjan.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/pg-leaving-ri-experts-lament-govt-inaction-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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