Soeharto opens RI's first TV tube company

Soeharto opens RI's first TV tube company

CIBITUNG, West Java (JP): President Soeharto yesterday
inaugurated the operation of the country's first TV tube
manufacturer, PT LG Electronics Display Devices Indonesia, in
Cibitung, West Java.

"This kind of industry is beneficial to (the country's)
development because, besides strengthening the television and
monitor industrial structure, it also encourages the production
of other television components," Soeharto said.

The company is a fully-owned subsidiary of LG Group, formerly-
known as Lucky-Goldstar Group, of South Korea, which was set up
in March with an initial investment of US$250 million.

PT LG Electronics Display Devices Indonesia's president, Ki-
Seon Park, announced before the inauguration ceremony that the
company's TV tube production, technically known as cathode ray
tubes, comprises color display tubes and color picture tubes
under the Goldstar brand.

"We expect to produce three million units of cathode ray tubes
this year and by the year 2000 we will expand the capacity to 6.7
million units per annum," Park said.

Park said that besides TV tubes, the company has an annual
capacity of 2 million videocassette recorders (VCRs), 600,000
computer monitors (MNT), 10.9 million electron guns (E/G), 2
million depletion yokes and 2 million playback transformers
(FBT).

"We will also expand the VCR production capacity to 2.5
million units, MNT to 2 million, E/G to 10.9 million, depletion
yoke to 6.6 million and FBT to 5.0 million by the year 2000,"
Park said.

He said that in line with capacity expansion, LG Group will
gradually increase its investment to approximately $450 million
by 2000.

Commenting on the company's sales target, Park said "We have
projected to book total sales revenues of $224 million this year,
$1.3 billion in 2000 and about $2.09 billion by 2005."

He also said that although the company will sell no more than
25 percent of its production on the domestic market, it will be
able to gain 60 percent of the country's cathode ray tube market.

Another cathode ray tube producer is Toshiba of Japan which
will come on stream later this year.

At yesterday's ceremony, Minister of Industry and Trade Tunky
Ariwibowo said Indonesia still needs more investment in the
manufacturing of electronic components to further deepen the
country's electronics industry.

Tunky noted that although electronics exports are the
country's third largest foreign exchange earner, in terms of
value, after textiles and wood products, their imported contents
are still high.

Last year, Indonesia's exports of electronic goods totaled
US$2.9 billion, representing a 13.4 percent increase over the
$2.6 billion in the previous year.

Indonesian electronic goods exports consist mainly of TV sets,
radio cassette recorders, videocassette recorders, and car audio
equipment.

The large revenue from electronics exports, however, does not
contribute much to Indonesia's balance of trade as most of the
export earnings are erased by the importation of electronic
components. Component imports stood at $2.3 billion last year and
$1.9 billion in 1994.

These electronics imports mostly consist of components such as
TV tubes, capacitors and integrated circuits.

Of the total electronics import value, Tunky said, Indonesia
spends over $250 million per annum for importing TV tubes only.

Tunky added that the operation of LG Electronics is expected
to reduce the electronic industry's dependency on imported parts
and components.

Tunky noted that the domestic demand for TV tubes would
continue to grow by 17 percent per annum until year 2000, far
higher than the world's average growth of 5 percent. Meanwhile,
the domestic demand for computer monitors is projected to
increase by 20 percent per annum.

This year alone, Tunky said, Indonesia will need some two
million TV tubes, and the demand will double by 2000. (alo/rid)