Cheaper security tools enter the local market

Cheaper security tools enter the local market

Sudibyo M. Wiradji
The Jakarta Post
Jakarta

The Bali bomb blast, which occurred in November 2001, followed
by a host of bomb threats in the following months, prompted many
building owners to beef up their security systems.

The need to adopt proper security systems was also reinforced
by the issuance of a Jakarta gubernatorial decree in April 2003
calling on owners of public facilities, including office
buildings, hotels, parking lots, cinemas, amusement centers,
shopping centers, restaurants and cafes, to take preventive
measures against terrorism by applying minimum security
standards.

As a result, there has been an increase in demand for security
equipment, such as access control machines, closed circuit
television (CCTV) equipment, security camera surveillance
equipment, walk-through metal detectors and inspection mirrors.

A wide range of security products by different manufacturers
is available on the market even though many of them are not
displayed publicly. Most distributors display their products in
their showrooms at their offices, while several others store such
items in their warehouses and show them only to prospective
clients.

"It is unnecessary for us to have a showroom for public
display because our business also includes designing, installing
and maintaining systems for our clients," said Yonky, a marketing
manager for Effresindo Citratama, a local security equipment
distributor.

Most of the security products are imported from the United
States, the United Kingdom, Japan, Singapore, Taiwan, Korea and
China.

The prices of such products vary, depending on the
manufacturer, product specification and design. For a CCTV
system, for instance, the prices range between Rp 2.5 million and
Rp 300 million. This includes installation and a one-year
maintenance fee.

However, with the flood of electronic security products from
China, customers can now find a CCTV unit for around Rp 200,000
in the Glodok Electronics Center in Kota Chinatown, Central
Jakarta.

"Many electronic security products made in China are flooding
the market and they are being sold at lower prices," another
trader said.

Even though current demand is not as high as it was two years
ago when bomb threats were everyday occurrences, security
equipment distributors still report solid growth in their sales.

PT Indolok Bakti Utama, a major security equipment
distributor, for instance, has enjoyed an average 17 percent
annual increase in demand for security products like access
control machines, alarms and CCTV.

"We are seeing increased demand for favorite security products
like finger print readers of more than 17 percent," said the
company's president director, Hindra C. Kurniawan.

PT Teknodev Inti Utama, another established distributor in the
security industry, has also been enjoying significant growth in
its sales. The company booked a 15 percent increase in its sales
last year.

One type of security equipment that is now increasingly
popular among companies is finger print readers. A finger print
reader is a machine used as part of an employee check-in system.

More companies are turning to finger print reader when it
comes to employee attendance because using finger prints is more
efficient than using magnetic cards.

"A finger print reader can take over the work of a human
resources officer," said Landy Tjie, an assistant marketing
manager for PT Datascript.

The good prospects for the security equipment business has
encouraged more companies to venture into the field.
Consequently, established players like PT Indolok Bakti Utama, PT
Teknodev, PT Cisco Mas, PT Datascript and PT Effresindo Citratama
are facing tougher competition from new players, which mostly
offer cheaper products.

But the major players say that the flood of cheaper security
equipment will not significantly affect their business due to
their different market segments. Most of the established security
equipment distributors sell their products to multinational
companies or banks.

"They will choose particular brands with good quality, which
they are familiar with, and besides, security systems are for
long-term use," said Yonky of Effresindo Citratama.

While the market for security products for buildings and other
vital facilities is enjoying good growth, the market for products
for private household security remains weak despite major
promotional campaigns.

"Even though more people may be aware of security systems,
many are still reluctant to use such systems due to financial
constraint," said Charles Aryopati, the director of Teknodev Inti
Utama.

Besides, most Indonesian people are not familiar with using
electronic security systems as a way to protect their homes.
"Most Indonesians are more accustomed to protecting their houses
by erecting high iron fences rather than installing an electronic
security system," he added.

Thus, it may take some time yet before there is a real demand
for security equipment from private households.