RI firms face QC, promotion problems

RI firms face QC, promotion problems

Tony Hotland, Jakarta

Most of Indonesia's small and medium enterprises (SMEs) cannot
enter the United States market, the world's largest, due to weak
quality control and a dearth of opportunities for promoting their
products.

"Only about 1 percent of our SMEs have ISO (International
Organization for Standardization) certificates, while the U.S. is
careful of incoming products and demands quality control
assurances, such as certificates or the green label in the case
of furniture products," Tjahjanto Budisatrio of the Management
Institute at the School of Economics, University of Indonesia,
said on Wednesday.

Together with the U.S.-Indonesia Society (USINDO), the
institute cohosted a seminar on Monday on strengthening
partnerships between both countries in economic and community
development. It was attended by representatives of SMEs, the
National Development Planning Board (Bappenas), and the Ministry
of Industry and Trade.

"Many SMEs pay little attention, if any, to such certification
as it's like an invisible investment to them, and they're unaware
of how it can improve the prospects of their companies. Even if
they are aware, they decide not to get one since as it's very
expensive," said Tjahjanto.

He said that it could cost up to Rp 80 million (US$8,888) in
Indonesia to obtain an ISO certificate, while it cost the
equivalent of around Rp 30 million in China.

"USINDO will try to lobby the U.S. and ISO providers so that
Indonesia's SMEs can pay less for certification -- at least half
the current fee. Hopefully, they will be allowed to pay by
installment over a two-year period," explained Emil Salim, a
member of USINDO's board of trustees.

USINDO will propose that the U.S. Congress donate $100,000 per
year to pay consultants and improve the circumstances of
Indonesia's SMEs. It hopes that up to 80 SMEs will be able to
obtain ISO certificates each year.

Emil, who is also a former environment minister, added that
during the seminar, Indonesian SMEs also wanted assured markets
for their products and more opportunities to promote them in the
U.S. through high profile exhibitions.

Around 98 percent of firms in the country are SMEs.

The seminar also discussed the capabilities of Indonesian
ports in handling Indonesian exports.

"We plan to monitor all ports in Indonesia. But our main goal
is to improve the human resources that operate the ports instead
of the infrastructure," said Budi Soetjipto, also a consultant
with USINDO the institution.

"We'll also coordinate with the Ministry of Communications
because the ministry has a program to upgrade a number of ports
to meet the ISPS (International Ship and Ports Security) Code,"
said Budi.

The obligation to apply the ISPS code was imposed last year by
the International Maritime Organization (IMO). As a consequence,
Indonesian ports and ships that provide international services
must meet certain security standard by the end of June.

There are only five ports considered "ready", but even these
have yet to adopt the code. They are Tanjung Priok, Tanjung
Perak, Tanjung Emas, Belawan, and Pelabuhan Panjang port.