Fri, 15 Oct 2010

TEMPO Interactive, Jakarta:Indonesian Trade Attachť in Singapore, Djunari, said Singapore will look at the electronic spare parts booth in the 2010 Trade Expo Indonesia which will take place in Jakarta. The trade expo, involving 810 participants, 500 of whom come from 20 countries, is estimated to be visited by 8.000 potential buyers. The total transaction during the five-day event is expected to reach US$300 million.

According to Djunari, the Trade Ministry will bring 14 potential buyers from Singapore in this year’s trade expo. If their plan to buy electronic spare parts can be realized, Indonesia’s non-oil exports to Singapore will increase.

Djunari said electronic spare parts dominate Indonesia’s exports to Singapore outside oil and gas products. Other products, like spices, textile, and textile products, are next on the list. Indonesia’s exports to Singapore is about 6 to 7 percent of the market.

From January to August this year, Indonesia‚Äôs exports to Singapore reached S$264 billion. Meanwhile, the re-export value totaled S$132 billion. Singapore‚Äôs export structure so far has not changed from year to year. ‚ÄúMostly it is electronic spare parts,‚ÄĚ he said. If the export value is to be increased, there would be no need for product diversification, but the quality of existing products must be improved.

According to Ali Soebroto Oentaryo, the Electronic Goods Businessmen Association chairman, Singapore is a traditional market for Indonesia’s export products besides Japan and the US. Meanwhile, the newly growing markets are Australia, France and the Philippines.

Ali said the positive demand for Asian products has raised the electronic goods exports from Indonesia. ‚ÄúThis is especially the case with countries that have free trade agreement with Indonesia,‚ÄĚ he said. The demand boosted exports during January to July to US$5,8 billion. The increase in exports is happening as demand from Europe is slowing down.

According to Ali, much of the high exports has been contributed by leading companies from South Korea, like LG or Samsung. These two companies produce components for other electronic products. They also produce goods especially for export.

Another interesting fact is the new export market. The Philippines, for instance, takes 4 percent of Indonesia‚Äôs total exports. Meanwhile the Australian and French markets each take 3 percent throughout this year. These new markets are linked to the relocation of some electronic companies to Indonesia. ‚ÄúSo they are just diverting orders over here,‚ÄĚ Ali said.

Earlier, Agus Tjahjana, the Trade Ministry secretary-general said the development of component industry should be encouraged. If Indonesia can develop its component industry, it can supply final industry anywhere. This idea was discussed with other electronic goods producers that are cooperating with foreign investors, like Panasonic.