The rapid growth of Indonesia’s manufacturing sector

The rapid growth of Indonesia’s manufacturing sector – a development buoyed partly by the arrival of several big-name mobile-phone manufacturers and partly by highly supportive central government legislation – has attracted electronics companies across the wider Asia-Pacific region.

Indonesia’s manufacturing industry grew 5.04 per cent in 2015 – higher than the national economic growth rate of 4.79 per cent.

Nowhere was this more apparent than at the May Inatronics event in Jakarta, Indonesia’s only trade show dedicated to the electronics and components industries.

Overall, many exhibitors – with the majority of them first-time participants – were keen to expand their operations in the country and find local partners and distributors.

Among this year’s first-time exhibitors was AiT Semiconductor, a Taipei-based manufacturer of analogue and mixed-signal integrated circuits. “Indonesia has huge potential for us, largely on account of its rapidly expanding manufacturing sector,” said Product Marketing Director Titan Fanching. “We are keen to look at opportunities here, but first we need to find the right partner.”

Overseas Competition

Local partners are not thin on the ground. According to the Indonesian Ministry of Trade, by 2014 the country was already home to 235 electronics and home-appliance manufacturers. Within the next two years, the value of the domestic manufacturing sector is expected to exceed US$20.3 billion. This expansion, however, has not been without drawbacks, with many local businesses unhappy about the influx of overseas companies.

“Competition is very tough right now,” said Baharuddin, a Marketing Supervisor with SolderIndo, an Indonesian manufacturer of soldering products. “This is largely because so many Japanese, Taiwanese, Chinese and Korean electronics manufacturers have entered the market.

“Despite this, I believe that the sheer size of Indonesia’s manufacturing sector means that there is enough room for both the new and established electronics companies to thrive. For our part, our point of difference lies in the quality of our products, all of which are on par with the best produced by any of the Japanese companies, while our prices are still a little lower.”

Local Manufacturing

Another Indonesian exhibitor looking to find new growth opportunities in the country was DMC Teknologi Indonesia, a subsidiary of DMC, the Tokyo-based touch-screen giant. “Overseas manufacturers looking for touch-screen suppliers will find it easier to do business with us because we are local,” said Henri Hendarmin, DMC’s Marketing Manager for Indonesia. “We manufacture here. That is definitely one of our advantages.”

Touch-screens are also an integral component of…

Source link : The rapid growth of Indonesia’s manufacturing sector by Hong Kong Trade Development Council

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