Selling local products

Selling local products

One of the many problems in a developing country is difficulties with marketing a local product. Constraints include less proficiency in management, a shortage of funds and a general lack of national pride.

The latest case is the refusal of PT Merpati Nusantara to lease the CN 235-200 aircraft, because high operating costs prevent it from being commercially profitable. From the point of view of Merpati, perhaps it's the right decision. But it would be better to consider the case in a national context.

CN 235 is a good aircraft produced by Indonesian engineers using high technology. It is let down only by the cost of buying and maintaining it. From the economic angle, it appears this aircraft is not viable. However, they had difficulty marketing the product because there is such a high interest rate penalty for leasing the aircraft. And if we buy aircraft from foreign countries we can expect to receive a loan from the sellers, known as an export credit.

So CN 235 should do the same. The institution that provides money for IPTN (the aircraft's producer) should not take high interest. Instead, it should make a profit from the sale of the aircraft.

SIHONO

Bandung, West Java