The government wants to throttle back imports of smartphones by getting manufacturers to set up their plants in Indonesia. Above, phones from local brand Evercross, displayed by models — from Australia. (Antara Photo/Ho Angga)

Build a Plant, Phone Makers Told

BY :RIDHO SYUKRA

JANUARY 21, 2015

Jakarta. Manufacturers of mobile electronic devices will have to build a factory in Indonesia by the end of the year if they want to keep selling their products here, a senior government official said on Wednesday.

“Indonesia must be a production base and not just a market,” said Ignatius Warsito, the Industry Ministry’s director of electronics and information technology industries.

He cited a Trade Ministry regulation issued in 2012 that he claimed allowed the government to revoke companies’ permits to import mobile electronic devices unless they built a factory in the country before the end of 2015.

The regulation makes no such requirement for importers. It only threatens revocation of their permits if they fail to import anything for six consecutive months, if they commit customs violations, or if they sell the devices direct to consumers or retailers and not through authorized distributors.

However, Warsito insisted that they must invest in a factory in the country, even suggesting that they could form a joint venture with local firms, or would have their permits “automatically revoked” at the end of the year.

That baseless ultimatum marks the latest salvo of blanks in the government’s blustering bid to throttle imports and develop a homegrown high-tech industry.

Last April, the Trade Ministry proposed a “luxury tax” on imported smartphones with a retail price of more than Rp 5 million ($400), but the plan fell flat. Previously, the Communications and Information Technology Ministry attempted to crack down on vendors selling devices without an Indonesian-language instruction manual — only to relent after it realized that most new devices ship without a physical manual.

Still, some device manufacturers have seen enough potential in Indonesia’s booming market for handheld electronics to boost their presence here.

Samsung, the world’s biggest mobile-phone maker, announced in 2013 that it planned to build a plant in Indonesia with total investment of $20 million, with production capacity of up to a million devices a month.

Chinese smartphone maker Oppo is similarly investing $30 million on an assembly plant in Tangerang, outside Jakarta, with planned output of 500,000 devices a month.

Indonesia imported 55 million mobile electronic devices worth a total $2.78 billion last year, most of them from China, according to the Central Statistics Agency.

Investor Daily

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