Local toymakers facing production problem
JAKARTA (JP): Local toy producers acknowledged on Wednesday their low production capacity often forced them to reject orders from overseas.
Umar, who owns U.D Umar, a wooden automotive toy company, said his company received many orders from foreign buyers, including ones from Australia, South Korea and Japan.
He said he was only able to partially meet the orders from Australia due to his firm's low production capacity.
"The Australian buyers want to buy 300 units of my toys every month, but I can only produce about 50 units per month. I could not increase my production because it would need a lot of workers and I could not afford it," he said on the sidelines of a toy exhibition on Wednesday.
Most of the toymakers said it was difficult to secure bank loans despite the government's pledge to provide cheap loans to promising small and medium companies.
Umar recounted how he tried to obtain loans from state Bank Rakyat Indonesia about two years ago, but found the complicated bureaucratic procedures overwhelming.
Yenny Puspita Dewi, a marketing staff member of toy and handicraft producer PT Sarinah International, said toy producers needed funds to increase their production capacity and improve quality amid rising prices of raw materials.
"But it is very difficult to obtain loans from banks, even for an export-oriented company like us." She said 70 percent of her products was exported to Singapore, Japan and Malaysia.
Eri, marketing director of toy producer PT Hamparan Ekonnusa Hawa Indonesia, said his company could only meet orders from its German buyers.
"We want to expand our business and sell our products to other countries apart from Germany, but we have limited production capacity."
National Agency for Export Development (BPEN) chairman Gusmardi Bustami admitted local toy producers had difficulties in meeting major orders.
"Small and medium companies are usually unable to mass- produce. This is the hardest challenge to solve, because the producers have not been accustomed to producing goods in big quantities but of good quality," he said at the opening of the exhibition.
Gusmardi admitted the local toy industry was burdened in increasing exports due to the soaring prices of imported materials and imposition of a high import tax.
He said the value of Indonesian toy exports dropped by 38 percent in the first eight months of the year to US$52.9 million, compared to $84.2 million in same period last year.
Foreign exchange earnings from toy exports are estimated to reach only $76 million this year, a 19.7 percent drop from $94.6 million in 1997.
Most of the exports are to the United States, Germany, France and other European countries and Japan. Over 50 percent of the exported items are stuffed toys.
Gusmardi said the toy industry was a prime candidate for development because of fine prospects and its labor-intensive nature.
"I think the government should lower the import duties on toy products because this industry has a great multiplier effect and becomes part of the social safety net due to its labor-intensive characteristics."
Gusmardi said the international market for toys currently reached $45 billion annually, with China the world's biggest supplier with sales of $7 billion a year.
BPEN, in cooperation with the Ministry of Trade and Industry, is holding the toy exhibition through Dec. 20. About 35 companies, mostly small and medium enterprises, are participating.
The exhibition is expected to help the industry cope with marketing problems encountered during the economic crisis, Gusmardi said. (gis)