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Govt says industry stable despite layoff concerns

Govt says industry stable despite layoff concerns

TUESDAY, February 09, 2016
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JAKARTA - The local electronics industry is expected to remain stable amid layoff concerns surrounding Japanese electronics giants operating in the country, an official says.

According to the Industry Ministry’s director for the electronics and telematics industry, Zakiyudin, there is still high demand from Indonesian consumers for electronic products and the sector is likely to grow this year, with the consumer market still developing.
Japanese brands Toshiba and Panasonic have recently been in the spotlight amid labor union claims that they plan to lay off hundreds of employees working for plants that operate in Indonesia, but the Industry Ministry has dismissed the claims.
“Panasonic and Toshiba are not carrying out massive layoffs — they are restructuring,” the ministry’s director general for metal, machinery, transportation equipment and electronic industries, I Gusti Putu Suryawirawan, told reporters.
Putu said that while the country’s overall electronics industry growth was relatively stable, the industry was affected by the local currency exchange rate, as most its components were imported from overseas. 
The head of the ministry’s research and development department, Haris Munandar, said his ministry had been developing an early warning system for industry development in light of an unusual surge in imports.
Indonesia’s electronics and telematics industry grew by 2.5 percent in the period between 2012 and 2015, with investment in the sector rising 25 percent during the same period, according to ministry data.
Total investment in the industry rose to US$6.6 billion last year from $5.9 billion in 2014, and the industry took on 499 new employees in 2015 as compared with 488 employees the previous year. 
The Confederation of Indonesian Workers Unions (KSPI) previously announced that Panasonic had closed its two factories and laid off 1,600 workers, while Toshiba planned to lay off 900. 
PT Panasonic Manufacturing Indonesia clarified the claims, with president director Ichiro Suganuma stating that his company had shut down its one lamp factory in Pasuruan and offered voluntary retirement programs to 425 workers. 
The closure of Panasonic’s lamp plant was due to a significant drop in demand for compact fluorescent lamps; the company has now shifted focus to developing light-emitting diode (LED) lamps, for which there is growing demand. 
“The important thing is that our commitment to the industry remains the same and our investment in LED technology development is still large,” Ichiro said. 
Meanwhile, Toshiba has clarified that the actual figure was 360 workers laid off, lower than the labor union’s report. 
According to Toshiba, the firm had to terminate the jobs of its permanent workers as the factory located in Cikarang produced well under its capacity last year because of a drastic drop in demand for televisions in the Middle East, a major export destination. 
“The site only produced 30,000 TVs out of a capacity of 350,000,” said a Toshiba executive who refused to be named, adding that the company had also terminated 1,000 workers’ contracts last year following the drastic drop in production.
Toshiba Indonesia was recently acquired by Chinese television maker Skyworth Corp. in a ¥3 billion deal that will be fully materialized this year, with a possible change of brand in April. “We’ll keep producing Toshiba TVs, but we remain open to the possibility of producing other electronic devices and therefore may need more workers in the near future,” the source said.
Investment Coordinating Board (BKPM) head Franky Sibarani said that the board was currently seeking formal clarifications from both Panasonic and Toshiba on the matter. 
“We can help them to improve competitiveness, including by issuing any necessary policies and coordinating with the relevant ministries,” Franky said recently.