RI parts industry sees promising growth
RI parts industry sees promising growth
The Jakarta Post
Jakarta
With electronic and automotive products still in high demand the
Indonesian parts industry will see high growth next year, a
Japanese trade organization official says.
"The parts industry here could grow bigger, on the condition
that it can enhance its technology, precision and the delivery of
its products," Japan External Trade Organization deputy leader
Ito Noritada said recently.
His organization brought 44 potential Japanese investors to a
two-day electronics and automotive parts expo in Jakarta last
week. The potential investors met with 78 local parts producers
during the event.
Several of the foreign investors at the expo said remedying
Indonesia's high-cost economy, eliminating illegal fees and
introducing tax holidays would also help boost the industry.
PT Indonesia Epson International president director Tokihiro
Okubo said the main requirements for competing in the global auto
parts market were quality and delivery.
In the past, the country's parts industry has grown slower
than the electronics and automotive industries, resulting in
massive imports of parts.
However, in the last three years the industry has seen steady
growth and its exports now exceed imports in terms of value.
The Ministry of Industry estimates the electronics parts
industry will grow by 13.2 percent in the next five years, while
the automotive parts industry will grow by 14.8 percent.
Currently, the domestic motorcycle manufacturing industry is
using 90 percent locally made parts in its production. This year,
associations expect to sell five million motorcycles on the
domestic market.
Electronics and automotive manufacturers still see late
deliveries and inconsistency in the quality and precision of
parts as hampering the growth of the domestic parts industry.
According to data from the Ministry of Industry, in 1995
Indonesia imported US$10 billion and exported $2.3 billion worth
of electronics and automotive parts, while last year it imported
$3.5 billion and exported $4.6 billion worth of parts.
Last year, exports amounted to $4.8 billion while imports
reached $4.4 billion. As of May 2005, exports reached $2.4
billion and imports were at $2.7 billion.
Indonesia's leading parts producer, PT Astra Otoparts (AOP),
for example, exports an average of $7 million worth of batteries,
of which a large part goes to the Middle East and Africa.
"We are trying to penetrate the market with other products
such as shock absorbers," said AOP president director Budi S.
Pranoto.