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)