Theft, looting threaten makers of electronics

Theft, looting threaten makers of electronics

JAKARTA (JP): Rampant theft and looting are threatening the
local electronics sector already battered by the slump in the
domestic demand, an executive of the local Samsung Electronics
affiliate said on Monday.

Lee Kang Hyun, marketing and export/import director of the
South Korean electronics giant, told Antara that the Association
of Electronics Industries filed complaints with the police.

Lee, who also chairs the association's government relations
division, said theft and the imposition of luxury taxes were the
two main obstacles to the development of the sector.

"So far, I have not seen any further action from either the
government or the police regarding my reports on these issues.
Nevertheless, I will persist in pushing the government (to take
action)."

Samsung alone lost 10 containers of VCR and CD-ROM players in
1998, mostly during shipment from the factory to Jakarta's
Tanjung Priok Port, he said. Each container was worth US$300,000.

"The looting has disrupted the overseas marketing of local
electronic companies." He added that many foreign buyers lost
confidence in the ability of Indonesian companies to deliver.

He warned that if the theft persisted, the $4 billion export
revenues set by the industry for this year would not be achieved.

In 1998, Indonesia exported $3 billion worth of electronic
goods. Samsung targeted $300 million in exports this year, a 50
percent increase from 1998.

Given the slump in domestic demand, most local electronic
companies are exporting about 90 percent of their production, Lee
said.

The domestic market also has been hit by the influx of
smuggled electronic goods, with the authorities seemingly unable
to act, he said.

On taxation, Lee said the luxury tax which often reached 25
percent for electronic products -- coming on top of a 20 percent
import duty -- was hurting consumers.

He urged the government to form a special team to attend to
the problems facing the electronics industry, which he believed
held a bright future in terms of exports and job opportunities.

Considering its potential, the government should provide
protection not only for production, but also the distribution of
electronic products, he said.

Lee said the government adopted various supportive measures in
the past, such as simplification of the licensing system and
steps to deregulate the sector.

But more efforts were needed to save the electronics industry,
he said.(02)