THE PROSPECT OF EXPORT 2013

The year 2012 was notably a bad for Indonesia’s export. The lowered export never succeeded to balance heavy flow of import. The high value of USD against Rupiah failed to motivate exporters to lift up export volume all was because the world’s demand was declining due to debt crisis in Europe and fiscal crisis in the USA.

The strange part of it was that strong value of USD against Rupiah never eased importers’ passion to import raw materials and capital goods from abroad. Those were the reason why Indonesia’s international trading was projected to post deficit. Even if there was any surplus chalked up, it never exceeded half a billion dollar. Indeed a low figure to compare surplus attainment of 2011 which was posted at USD 26 billion or surplus of 2006 and 2007 which was posted at USD 450 million respectively.

Admittedly and undeniably export performance through the ten months of 2012 was showing downturn. The Central Burau of statistics released their latest data that Indonesia’s export of October 2010 was posted at USD 15.67 or down by 1.45% against September 2012 (m o m). Meanwhile compared to same period of 2011 export dropped by 7.61% (y o y).  

Meanwhile non oil-gas export in October 2012 reached USD 12.68 billion, down by 3.42% against September. Apparently compared to export value of October 2011 it went down by 8.75%.

Accumulatively non oil-gas export through January - October 2012 reached USD 158,66 billion or down by 6.22% against export of the same period of 2011, while export of non oil gas reached USD 127.03 billion or down by 5.07%.

In the eyes of the Government, one of the cause of export downturn was tat Indonesia had not benefited export potentials to the maximum. Furthermore the Government tried to overcome by motivating exporters to jack up export potentials of Small-and-Medium Business, taking into account some aspects.

Firstly, in marketing products to export destination countries, exporters needed to prepare various commodity items to be placed in one container. Meaning, not just one single item of UKM product, perhaps 150 items could be placed in one container.

Secondly, exporters must follow the rules for labeling in export destination countries. The concept of packaging and use of language must be in accordance with the regulations in the export destination countries.

Other point to be observed was the need for warehouse in seaports to accommodate goods for export which were to be transported to destination countries. This was to enable goods sorting and selecting process; furthermore at the point of arrival the goods would be distributed to the related regions.

Meanwhile business circle rated that the downturn to export was not due to minimum export potentials at home but rather because of global crisis in America and Europe, while some Government regulations were not on the side of businesspeople. One of the examples was Regulation of the Ministry of Finance (PMK) no. 253 which regulated Ease for Import for Export Destination (KITE).

The regulation made it mandatory for exporter of Textile-and-Textile products to pay Value Added Tax (Ppn) in advance. The result was that the process of tax restitution becoming more lengthy which disturbed the industry’s capital system. The Regulation also mentioned TPT companies were not permitted to delegate order so subcontractors which made it difficultly for the industry to meet demand for TPT aboard.

They found it hard to export products because restitutions expenses must be paid in advance; yet in yet in the past such was not required. Policy of the Directorate General of Finance, Ministry of Finance was rated as disadvantageous to businesspeople.

Data of the Indonesian Textile Association (API) had it that value of export realization of textile dropped by 6.1% from USD 6.76 billion in first semester of 2011 to become US 6.38 in Semester one 2012. TPT producers were expecting that incentives for the industrial sector be maximized and regulations that held back export potentials be eliminated.

Furthermore, what was the potential of export next year? Exporters combined in the Indonesian Exporter Companies (GPRI) estimated Indonesia’s export performance in 2013 might slowdown as economic condition and the USA and Europe were still unstable. It was projected that performance of the industry sectors like TPT would continue to decline as demand from the Europe and USA market were still low. Demand for export of all commodities also continued to drop unless there was betterment of prices in minery goods.

It was not just the TPT Industry which was under pressure, the condition of collapse in the export destination countries, especially America and Europe had made Indonesia’s export to furniture and woodwork products to predictably drop by 10% - 15%, but still the projection was better than the condition of downturn in 2012 which came to 20% - 30%.

So far the USA was the export destination country for furniture and woodwork products with market share posted at 30%. The unending crisis in America made the furniture and woodwork market in that country zestless. A condition which was more or less the same was also happening in Europe, especially Spain and Germany. The market share Europe was posted at 27%.

The condition had made the biggest export market to be energetic. The total export value of last year was posted at USD 1.8 billion or Rp. 17.1 trillion. Only big enterprises existed. However they expected the furniture and woodwork market to be compensated by export to the Asean market.

They were confident that competitiveness of Indonesia’s furniture and woodwork products was still strong in Southeast Asia. Moreover purchasing power of consumers in Asean states were considerably high, the population of Asean countries were high too. Their economy were notably solid so it was only natural that they serve as market for Indonesian products.

However, businessplayers should not solely focus on the export market, but they should also tap the domestic market. As known, Indonesia’s domestic market treasured enormous potential so supposedly Indonesian furniture and woodwork products were the Nation’s symbol of pride.

In the future Indonesian furniture producers planned to open new markets to Africa, the middle East and Asia. However, the program needed direct support from the Government in the form of promotion facilities and marketing at international scale which were being awaited for so the existing producers would keep performing.

The handicraft sector was not free from the effect of global crisis evidently wood crafters from Semarang, Central Java were zestless. The export market for wood craft products in Semarang were losing steam as their export dropped by 25%. Nearly all crafters as their grievances as export to Europe and America continued to decline. Predictably this condition was to continue for many years ahead.

Export downturn had been happening since 2009. Today export volume sank as deep as 25% of the total return of woodcraft producers.

The declining export was due to lowered purchasing power of consumers in export destination countries like Holland, Spain, Germany and some countries in Asia. Crisis in Europe and the USA and other export destinations caused the export market of woodcraft products to decline. Export stagnation and downturn would predictably last long as long crisis prevailed.

Although the global crisis was not over yet, the sullen business climate made handicraft producers more creative in aiming at the domestic market. Apparently the local market was not less potential than the export market. For that matter it was right for them to tap the domestic market amidst booming local market today.

According to the handicraft producers, opportunities in the domestic market was wide open and highly prospective as indicated by the storming imported products. Such was a challenging condition which motivated Indonesian producers to compete. They participated in promotional events like the INACRAFT EXPO in Jakarta which was stage annually. Sales of woodcraft products was believed to be highly prospective. In a single participation at exhibition the sales turnover could come to Rp. 25 million.

To spur on sales some crafters were striving to create products of high quality and functional and of high aesthetic. For example, when producing woodcraft, they made useable products like chairs, tables, ashtrays etc. So far product design trend to be monotonous and so they must be encouraged to improve quality of products according to market demand.

Upon embarking on 2013, national exporters still had to face global uncertainly. Furthermore, the market condition had not fully recovered while production cost increased.

In 2013, the industrial sector would have to face increase of electricity tariff (TDL) of 15%, increase price gas and increase of minimum wages (provincial) while market demand was declining; all those factors burdened players of the industry. All in all the prospect of export for next year was still gloomy. (SS)

Business News - December 28, 2012