Cable manufacturers expect better market
JAKARTA (JP): Exports of wire rods, wires and cables are expected to rise 7 percent this year, up from US$177 million last year, the Indonesian Electric Cable Manufacturers Association said yesterday.
Association chairman Kusudiarso Hadinoto said exports of these goods were expected to be worth $190 million this year. Exports went to the United States, Australia, Japan and Europe as well as developing countries such as Sri Lanka, Thailand and Iran.
He would not give estimates for next year, but said the association expected better prospects for the domestic market in 1997.
"We hope that next year, the (state electricity company) PT PLN will no longer have liquidity problems so we can expect the domestic market to be more responsive to our products," Hadinoto told a press conference yesterday.
He was accompanied by association board members, including executives from PT Putera Ometraco Electric, PT Sucaco, PT Federal Mardhika Corporation and PT Voksel Electric.
Domestic demand for power cables is growing between 15 percent and 17 percent a year while demand for telecommunication cables is rising between 20 percent and 22 percent.
He said this year was difficult for power cable makers because of PLN's liquidity problems in 1995.
PLN and state telecommunications firm PT Telkom are cable producers' main customers.
Because of its financial problems, PLN often delays paying suppliers. PLN also delays its cable-installation programs, leaving lots of cables idle in its warehouses.
"This situation affects the cash flow of cable producers," he said.
Hadinoto said the oversupply meant few big orders from PLN this year.
"This caused power cable producers to invade customers on the non-PLN market, which in fact is only 25 percent to 30 percent the size of the PLN market," he said.
Hadinoto said there was still an oversupply of power cables.
He said from next year, PLN would implement "cooperation agreements" with cable producers that had ISO-9000 certificates for quality management. The agreements were basically long-term contracts for cables supplies.
"Hopefully the agreements will include clauses on penalties to be imposed on late supply (by producers) and late payment (by PLN)," he said.
Hadinoto said telecommunication-cable producers would have to start focusing their production next year on optic fiber telephone lines, which would gradually replace conventional copper cables.
The country has four optic-fiber cable factories, and two more will begin production next year.
Rusmin Cahyadi, the director of Voksel Electric, said 20 percent to 30 percent of Telkom's new telephone lines planned for the Seventh Five-Year Development Plan, which starts in 1999, would be optic fiber.
The association, established 1972, has 32 members: 12 have ISO-9000s certificates for quality management. (pwn)