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.