Integrated technology urged for mobile firms
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Indonesia may have evolved into a valued market for mobile phone companies but only with the presence of integrated infrastructure will it become a billion-dollar centre for device manufacturing, industry players said recently.
Janto Djojo, marketing director with Cross Mobile, said Indonesia must have competitive values that will pull foreign investors in.
“Many [device] factories choose to set up facilities in Vietnam,” Janto said, blaming complexities here for scaring away investors. Cross is a domestic mobile phone brand that sources its products from factories in China.
The Industry Ministry last year announced the postponement of an investment plan by Taiwanese electronics manufacturer, Foxconn, a subsidiary of Hon Hai Precision Industry.
The ministry said the firm, which reportedly produces 40 per cent of the world’s electronics for giant brands such as Apple, had yet to meet several requirements.
The lack of factories supporting this industry is also a big concern.
Ben Siagian, country manager of Qualcomm Indonesia, said an ecosystem of factories that provide an array of material needed in the manufacturing of devices was essential.
“The city of Shenzhen in China emanates the scent of industrialisation because all your end-to-end needs for the manufacturing of devices are readily available there,” he said.
In addition, distribution is a concern.
Hidayat Tjokrodjojo, chairman of the Indonesian Computer Entrepre-neurs Association, said the smoothness of distribution in Indonesia was hindered by poor roads and clogged ports.
“The maintenance of infra-structure fell to the wayside when the crisis struck Indonesia,” he said, adding that the steady flow of electricity was another issue factories had to contend with.
Although Indonesia was a large market, mobile phone makers would continue manufacturing in Vietnam and China if it was cost efficient.
“Companies in Hong Kong and China offer free on board [FOB], which means that they cover insurance costs,” he said.
Industry players noted that Indonesia could emulate the automobile industry by doing device assembly first and when that went well, move up the value chain to manufacturing.
Meanwhile, certain companies have already conducted manufacturing in Indonesia, albeit not mobile phones.
