Govt may cut sporting goods import duties

Govt may cut sporting goods import duties

JAKARTA (JP): Minister of Industry Tunky Ariwibowo said here yesterday that the government is considering lowering some import tariffs as far as zero percent on raw materials for sporting goods in hopes of improving the competitiveness of local products.

Acmaddani G-Martha of the Sporting Goods Industry Association, who met Tunky yesterday, quoted the minister as saying that he will discuss the possibility of lowering import tariffs on such materials with other members of the tariff team.

After last month's reshuffle the tariff team is now comprised of Tunky, Minister of Trade Satrio B. Joedono and Minister of Agriculture Sjarifudin Baharsjah as members, Coordinating Minister of Industry and Trade Hartarto as chairman and Minister of Finance Mar'ie Muhammad as vice chairman.

Martha noted that reduced import tariffs will help sporting goods producers keep the competitive edge following the government's plan to raise local minimum wage levels between 11 percent and 35 percent as of April 1.

"Our factories are mostly labor intensive and thus we are very sensitive to changes in labor wages," he said. "So, if the government agrees to lower import tariffs like we have proposed, it will offset the burden of our production costs stemming from the rise in labor wages."

He noted that import tariffs on a number of raw materials for sporting goods are still high, ranging from 30 percent to 40 percent.

According to the director of sporting and educational goods industries, Sakri Widhianto, there are 68 companies nationwide producing sporting goods such as balls, rackets, nets, golf equipment, fishing and other water-sports equipment as well as articles for gymnastics and athletics.

In 1993, Indonesia's exports of sporting goods, excluding sporting shoes, reached US$31 million, 8.25 percent higher than the previous year. During the January-June period of last year, exports increased by 7.5 percent to $11 million from the same period of 1993.

"Only 30 percent of the country's total sporting equipment is exported, while the remainder is marketed locally," Sakri said.

Indonesia's imports of sporting goods, however, stood at only $7.7 million in 1993, down 14 percent from the previous year of $8.99 million.(rid)