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)