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.