POTENTIAL OF SMALL & MEDIUM-SIZED LEADING INDUSTRIES BECOME A FORCE IN FACING ASEAN ECONOMIC COMMUNITY

Products of small & medium-sized leading industries of Indonesia based on creativity and local culture differentiate Indonesia from other countries, and it becomes a force in facing the ASEAN Economic Community (AEC) in December 2015. According to the Secretary General of the Ministry of Industry, Syarif Hidayat, after opening the exhibition “Featured Products of Java and Bali,” at Plaza Industry, on Tuesday (June 16), leading Indonesian products in the field of fashion include batik, songket, and woven cloth become a force that differentiates Indonesia from other countries in the region.

“We have a number of potential diverse superior products in very region in Indonesia. When given a touch of design and creativity, these products turn into an extraordinary richness of Indonesia. Indonesian small & medium industries are well prepared for AEC, especially in the field of fashion. Almost very Sunday, Malaysian people are shopping at Pasar Baru Bandung, and many of them go to West Sumatra. In addition to fashion, they also like typical culinary products of Indonesia, explained Sharif, who since June 16 replaced Ansari Bukhari as Secretary General of the Ministry of Industry.

He added that innovation and creativity are always changing and have a high value, so it is not easily imitated. And, the ministry of Industry through the Directorate General of SMEs has product development programs, training through mentoring, and startup capital in a number of industries, such as small & medium rattan wood furniture industries; small & medium palm oil processing industries; specialty coffee processing industries; cocoa processing and seaweed processing industries. A similar program is also aimed at SMEs, namely cooper casting, agricultural machinery industries, automotive and iron ship industries; ship components and automotive and iron ship components and automotive components industries; as well as nickel/stainless steel based household appliance industries.

Specifically related to natural coloring, in addition to training, the Directorate general of SMEs also held natural color mapping, woven cloth design competitions and natural color fiber and natural color batik, as well as exhibition of products of natural color. Sharif added, “Culture heritage is a source of inspiration in producing innovative products with value-added and high competitiveness. Hopefully, Indonesia who is rich in culture heritage can be a huge potential in the development of the fashion industry sector based on tradition and culture.

Natural coloring is also applied in the collections displayed by utilizing local plants. “natural coloring has a special attraction for the fashion industry markets with soft and natural colors that make many people like this type of color. In fact, the Go Green movement in the industrial world makes people increasingly love products that are environmentally friendly and safe to use. Currently, in the world there is a concept of “ethical fashion”, which has been known in many countries, “he said.

The exhibition, as stated by the Director of Small and Medium Industries Regiion II of the Ministry of Industry, Roy Sianipar, is a government efforts to promote a variety of featured products of Java and Bali as a creative economic base. USE of the products produced locally should be supported by improved quality through adequate provision of raw materials, improvement of production technology, and packaging, or branding. Thus it can spur economic development and have impact on the provision of employment opportunities and development of qualified and independent individuals.

In this written speech, Syarif Hidayt revealed that statiscal data in 2013 showed that the number of large and medium processing industries that the number of large and medium processing industries in Java reached 19,773 units, and outside Java 4,168 units. Various well-known handicraft products that have been exported to many countries include batik, pottery and decorative ceramics, furniture, Gedongan woven fabrics, silver and other jewelry as well as a variety of calligraphy products, while, Bali, which is known as a magnet of Indonesia, has a variety of natural beauty, culture, and traditions that become an attraction for foreign tourists traveling to Indonesia. One of the products known in Bali is carved handicrafts, Endak woven fabrics, silver and other jewelry as well as a variety of calligraphy products. While, Bali, which is known as a magnet of Indonesia. One of the products known in Bali is carved handicrafts, Endak woven fabrics, catur fabrics, beach cloth, prada, and songket. (E)

Business News - June 19, 2015

THAILAND AND VIETNAM, THE TOUGHEST ELECTRONIC COMPETITORS IN THE ASEAN REGION

As a company engaged in electronic manufacturing services, PT Sat Nusapersada, Tbk. (PTSN), expressed its commitment that the company has been prepared to face ASEAN Economic Community (AEC). As stated by President Director of PT Sat Nusapersada Tbk., Abidin, in facing AEC at the end of this year, although it has been prepared, the company still needs legal certainty.

“Competing with other ASEAN countries such as Singapore, Indonesia is quite superior. Precisely among other ASEAN countries, it is tough when dealing with Thailand and Vietnam. Because Thailand has a fairly solid supporting industries, such as automotive products, that have entered Indonesia, and most of them are mostly produced in Thailand. Likewise, there are some electronic products that are still imported by Indonesia from Thailand.

Both Vietnam and Thailand have been prepared by strengthening their local content in their industries. Thailand has long embarked on local content program, and there is a number of world brands that have started to make investment, both in Thailand and Vietnam. That is why Indonesia should already start the rule on the use of local content (TKDN) as this rule does not violate the regulations of the World Trade Organization (WTO). A country has the right to protect its interests by reason of increasing the competitiveness potential of the industry.

Meanwhile, other countries such as the Philippines, is still below the competitiveness potential of Indonesia in the fields of electronics, mainly because of its national security. It is estimated that Indonesia’s strength is almost equivalent to Malaysia, “he told Business News. Samsung makes Indonesia a Mobile Phone Production Base.

Meanwhile, during the launch of mobile phone factory of PT. Samsung Electronics Indonesia (SEI) in EJIP Cikarang Industrial Area, Bekasi, West Java, on Tuesday (June 16). Industry Minister Saleh Husin expects that with the operation of the plant, it is expected that PT SEI to continue to make Indonesia its production base to meet the needs of the domestic and export markets.

The minister appreciated PT SEI who participated in building assembly plant for the production of mobile phones. “The seriousness of the company in developing mobile phones in Indonesia is expected to continue, where at this early stage is assembly process in the form of semi-knocked down (SKD), and will continue in the form of completely knocked down (CKD) and also in the form of surface mount technology (SMT), “he hoped.

The minister also believes that the company’s commitment to develop mobile phone industry in Indonesia in an attractive option and the right location to invest. In the first stage in 2015, Samsung invested in the construction of mobile phone assembly plant at USD 23 million.

The production capacity of the plant ranges from 1 to 1.5 million units per months with 14 production lines that manufacture smartphones, feature phones and tablet computers. The factory which occupies an area of 6,000 m2 absorbed 972 workers. This company has given employment opportunities to quite a lot workers, as well as contributing to increase of human resource development and social welfare.

In addition, the establishment of mobile phone factory of PT. SEI provides room for growth of supporting industries, such as mobile phone parts industry. “It is expected that the mobile phone industry in the country continues to grow and plays an important role as well as being part of the supply chain of the world’s mobile phone products,” he said.

The Minister of Industry urged the company to continue to increase local content by involving more domestic industries. “To maintain the continuity of the company, we expect that the leaders of the company, the management and the employess can work well together to build a harmonious relationship, so as to create a good working atmosphere in order to encourage productivity increase,” he said.

This is in line with the main program of the Ministry of Industry, especially in the design of industrialization road map, there where the electronics industry including the mobile phone industry, is one of the priority industries as a group of industries with high growth. (E) 

Business News - June 19, 2015

REVITALIZATION OF MARKETPLACE MIGHT JACK UP TURNOVER

The Ministry of Trade was ready to run revitalization of 1.000 marketplaces by 2015 financed by APBN Stated Budget. The budget for revitalization was posted at Rp.2 trillion.

Minister of Trade Rachmat Gobel stated on Tuesday (16.6) that performance of pilot project marketplace revitalized by the Government had increased average turnover by 70% per year. The increase of turnover was based on evaluation by the Ministry of Trade on 32 pilot project marketplaces. As planned, the Ministry of Trade would revitalize up to 1,000 marketplaces this year.

He said that increase of turnover showed that the marketplace revitalization program was most beneficial to increase income of people’s market most of which were micro, small and medium business. Soon the marketplace would be the vehicle for smooth distribution of goods. He expected the revitalized market would be benefited and be well taken care of.

Rachmat explained that the revitalization of marketplaces was not only on the physical side but also the management aspect in terms of cleanliness, safety and convenience. Rachmat said that marketplace management would be the main issue in maintaining stability of essential needs. Betterment of marketplaces was to step up competitive edge of traditional marketplaces against modern markets which had been regarded as competitor t traditional markets.

Minister Rachmat remarked further that traditional markets could not compete against modern markets as the physical condition was not comfortable while the products on sale were below standard, so the public tend to choose to visit modern markets where the facilities were better and the ambience more pleasant. The Minister assured that the Government was constantly revitalizing traditional markets although not being able to fully meet public expectations.

Meanwhile the Director General of Domestic Trading Srie Agustina said that she planned to renew policis on marketplace revitalization by 2015 which was not only oriented to physical and management but also to involve the private sector. Srie said that the market revitalization program was only focused on management on the physical side and management including zonation and guidance to traders. By next year, marketplaces revitalization would be expanded to economic revitalization and social cultural. The objective was to make marketplaces as hub of distribution from upstream to downstream.

Data of the Ministry of Trade had it that in the past 4 years revitalization had been exercised on 560 people’s market, 52 of which were pilot projects; in the said program, most of the marketplaces posted increase of turnover by 213%. The fund needed to revitalize 1 market was Rp.2 to Rp.12 billion exclusive of public facilities based on per province approach. For 2015 the Ministry of Trade procured fund of Rp.997 billion to revitalize 469 marketplaces. Srie stated that by next year 335 marketplaces would be renovated using DAK special budget while another 37 marketplaces would be using Government’s fund.

To refer to the program of the Working Cabinet to revitalize 5,000 marketplaces in the next 5 years, surely that fund would not be enough to build 1,000 marketplaces per year. Moreover Srie said, the longer takes to revitalize a market, the higher would the cost be. Today alone there were 800 proposals still not answered. For the matter Government would set up access for the private sector to invest in the people’s market project. (SS)

Business News - June 19, 2015

MORE THAN JUST ECONOMIC VICE, ENVIRONMENTAL CRIME THREATENS HUMAN LIFE

Through 2014 the Ministry of Environmental Affairs and Forestry had handled not less than 200 cases including illegal logging, Forest exploitation and smuggling and trading of wild protected animals. Over the past 6 months till May 2015 the integrated team of Deforestation and Environment had received 280 cases.

“Some of the big cases were complicated well organized crime of international linkages. In accordance with President’s commitment the Ministry of Environment had to take firm and uncompromising action on such a crime” Rasio Ridho Sani, the Director General of Law Enforcement of the ministry of Environmental Affairs and Forestry was quoted as saying.

Today the Ministry of Environmental Affairs was preparing a concept to revise Law No 5 year 1990 on Conservation of Natural Resources and Economic system. By that concept convicts would be severely punished for deterrent effect.

Today all officials of Director General of Law Enforcement agreed to step up sanctioning on forest crime trough multidoor power and collaboration by scientific approach and systematic thinking.

Law Enforcement which did not bring deterrent effect would diminish public trusts in the Government. Damaged forest would reduce the function of environment to Man, causing ecologic disaster and even threatened human life.

Illegal logging big loss to the state, economy wise, but the biggest threat was on the safety of communities living near the forest. Many natural disasters happened because of poor forest coverage.

Separately the Minister of Environmental Affairs and Forestry Siti Nurbaya stated that for trading of wild animals, by Law no. 5 years 1990 the punishment was 5 years of imprisonment and fine of Rp100 million. Such publishment was to lenient and would not cause any deterrent effect and must therefore be revised.

Admittedly law enforcement for illegal trading of protected animals was not easy, considering Indonesia’s vast wilderness and the so many animals to protected. Still the Government was committed to crackdown on this crime.

About forest damaging Bambang Hendroyono stated that at present there were three National Game Parks i.e. Gunung Lauser, Kerinci Seblat and Bukit Barisan being damaged; in 2014 deforestation was posted at 128,994.9 ha.

The areas had changed their function to become plantations, dry agriculture and other purposes. To overcome the problem a map of zonation was drawn so the public could use the forest without damaging the eco system.

In the execution of zoning the Government could involve Non Governmental Organizations whereby the people were permitted to use land but not own them, thereby the people would have their income while the eco system was well guarded. (SS)

Business News - June 19, 2015