Foreign engineering firms upbeat on RI's manufacturing sector
Foreign engineering firms upbeat on RI's manufacturing sector
Fitri Wulandari, The Jakarta Post, Jakarta
There is great optimism among foreign engineering companies that
Indonesia's economy is moving toward recovery, which would bode
well for their businesses here.
This optimism was apparent during last week's four-day
international manufacturing machinery exhibition in Jakarta,
which featured companies from around the world, including from
the U.S., the UK, Germany, the Czech Republic and Singapore. It
was called the largest expo for industrial machinery in the
country.
"Participants come here because they know that the economy is
recovering and there is growth," said Indra Putra, director of
exhibitions at Pamerindo Buana Abadi, the expo's organizer.
The participants seemed unperturbed by recent news that a
growing number of the country's manufacturers are facing
bankruptcy because of the poor economic climate, security
problems, lingering labor disputes and rampant smuggling.
"There is a degree of political stability in the market and
economic growth of three to four percent in Indonesia. It
provides optimism for the future," Dai Harries, representative of
the British Engineering Industries Association (EIA), told The
Jakarta Post.
EIA, the largest trade association for industry in the UK, led
14 British companies at the exhibition looking for distributors
and customers in the local market.
Of similar opinions were the director of the German
Engineering Federation (VDMA), Hubert Laier, and the head of the
Commercial Section at the Czech Embassy in Jakarta, Martin Basta.
"This is a period when Indonesia's economy is shifting from
stabilization to growth. We come at the right time to promote
foreign trade with Indonesia," Basta told the Post.
"The three to four percent economic growth encourages us to
come to Indonesia, and we hope to enlarge our market," Laier
said.
Eighteen Czech companies took part in the exhibition offering
various manufacturing machinery, from woodworking to food
processing equipment.
Meanwhile, Germany was represented by 25 exhibitors, led by
VDMA. Laier said the number of German exhibitors increased from
14 last year.
This optimism flies in the face of the negative news coming
out about the country's economy and manufacturing sector.
Foreign direct investment and domestic investment approvals
have declined for a number of reasons, including labor conflicts,
poor labor policies, a poor implementation of the autonomy law
and global economic uncertainty.
And many manufacturing companies in the country are going out
of business. The Association of Footwear Manufacturers
(Aprisindo) reported that some 100 local footwear manufacturers
had closed down their factories over the last three years.
The toy industry is facing a similar situation, with some 60
local companies going bankrupt and 40 others struggling to
survive.
However, for many expo participants Indonesia remains a market
full of potential.
"Indonesia's consumption power is so big, we hope to build up
closer trade relations with Indonesia," Eugene Lim, the manager
of the Singapore Precision and Tooling Association (SPETA), said.
SPETA led some 15 Singaporean manufacturing companies to the
event. Lim said that next year more Singaporean engineering
companies were expected to take part in the exhibition.
Despite the optimism, expo participants continued to harbor
some worries. Most participants said the government's inability
to provide legal certainty would dampen optimism.
"I would say the labor law will be one aspect that could
depress the economic recovery," Dai Harries said.
The exhibition itself was a success, seemingly justifying the
participants' optimism.
"This was the biggest exhibition since 1997. We never expected
that it would be this successful given last year's exhibition,"
Indra Putra said.
The number of visitors jumped from 27,000 people in 2001 to
53,400 this year.
And the number of participants also increased significantly,
from 1,100 in 2001 to 1,500 this year.