Electronics firms in Taiwan up beat on Indonesia's prospects

By Sylvia Gratia M. Nirang

TAIPEI (JP): Taiwan electronics firms have expressed optimism about Indonesia's prospects, saying they will invest in the country once it recovers from the crisis.

Executives of two major electronic firms said at a meeting with visiting Minister of Industry and Trade Rahardi Ramelan on Thursday that Indonesia remained a promising destination to develop an electronic industry because of cheap labor.

The chief executive officer of Chang Shing Electric Co Ltd, C.H Cheng, said his company was sounding out investment opportunities in Indonesia.

"We are currently seriously studying investment possibilities. We are interested in building a transformer industry because Indonesia has so many people and labor costs are much cheaper compared to those in Taiwan and other countries," he said.

Cheng said his company was also looking for opportunities in Malaysia and other Asian countries.

"But Indonesia is our main focus. Why? Because the economic crisis has made Indonesia a very attractive place to make investments."

C.H Yang of the Shihlin Electric and Engineering Corporation said his company had built a US$150 million plant at Lippo Industrial Park in Cikarang, West Java, to manufacture motorcycle parts for Kymco Motors.

However, the country's worst ever economic crisis had caused a slump in Kymco's sales, forcing Shihlin to temporary cease its operation in Indonesia.

"Right now we are waiting for a turnaround in Indonesia and we believe that it will happen soon. That's why, we will maintain our investment in the country," Yang said.

But Yang complained about the complicated bureaucracy in Indonesia, which he said contributed to high hidden costs for businesses.

"But we heard that the Indonesian government is currently preparing a new policy on the electronics industry. I hope it will help us in doing business in the country."

Rahardi told the two companies to shift their focus from the shrinking domestic market to the export market.

"In the current situation, you cannot expect good sales from the sluggish domestic market. But you can export your products while making Indonesia your manufacturing base."

Rahardi is leading an Indonesian trade and investment mission to Taiwan from May 13 to May 15 to enhance trade between the two countries.

Rahardi said he would urge Taiwan's electronic industry to rethink their marketing strategy in regards to Indonesia.

"Taiwan is one of the biggest electronic producing countries. But they only see us as a big market. If they could use Indonesia as a manufacturing base, they could transfer their technology to us."

Lack of information on business opportunities in Indonesia has led to a reluctance on the part of Taiwanese investors reluctant to invest their money in Indonesia, he said.

"They do not know that there are many companies selling assets to restructure their operations. Taiwan is also a market we have to catch."

Taiwan is the sixth biggest foreign investor in Indonesia. Approved investment reached $165 million in 1998, or about 2 percent of the total approved foreign investment of $13.6 billion in Indonesia that year. (gis)