Indonesian subsidiaries of Japan's leading electronics maker Sanyo Electric Co. Ltd. remains upbeat about local demand despite forecast lower growth.

Sanyo, which is about to be purchased by rival Panasonic Corp., for US$10.1 billion, forecast demand for electrical appliances could slump slightly this year to around Rp 18 trillion ($1.6 billion) from Rp 17.5 trillion estimated last year.

However, PT Sanyo Sales Indonesia, which sells household electrical appliances, has forecast sales may rise 10 percent on last year's Rp 800 billion, says the company's vice president, Donny Karampis.

In 2007, company sales of refrigerators, washing machines and air conditioners reached Rp 566 billion.

However, Sanyo's major gains are likely to slow this year as the deepening global economic downturn affects sales in Indonesia."We are already feeling the pinch of the global economic crisis," said Donny. "Sales have been going down since December."

He added the first half of next year would be a rough period for Sanyo and other electronics producers as the economic downturn progressed.

This will be exacerbated by higher costs for importing components while selling prices will remain unchanged to keep the products affordable to the consumers, amid a possible decline in purchasing power, according to Donny.

"But we remain upbeat that during the second half of the year, after the general elections, we will probably see a rebound in demand," Donny said.

Business associations have forecast the impact of the global economic downturn on Indonesia may ease off during quarter three of next year. Indonesia has been heavily relying on domestic consumption to boost economic growth.

The central bank's recent cut in its benchmark interest rates by 50 basis point to 8.75 percent to help spur people's purchasing power. About 70 percent of purchases of home electronic appliances are financed by loans.

Having been operating in Indonesia since 1970, Sanyo employs more than 10,000 workers in its seven local subsidiaries; PT Sanyo Indonesia, PT Sanyo Jaya Components Indonesia, PT Sanyo Electronics Indonesia, PT Jaya Indah Casting, PT Sanyo Energy Batam, PT Sanyo Precision Batam, and Sanyo Sales.

Currently, Sanyo secures around 10 percent of the nation's market share for refrigerators, 13 percent for washing machines, 7 percent for televisions and 2 percent for air conditioners.

Sanyo's visiting vice president and chief regional officer for Asia Pacific region Yoshiori Nakatani said the company was seeking to invest in a solar panel plant in Indonesia.

According to Nakatani, sales for the Asia Pacific region alone, including Indonesia, would reach $600 million by 2010, up from $130 million from 2007.

The company's consolidated sales of its Indonesian units are estimated to reach Rp 2 trillion by 2010, or 33 percent of the region's total sales.

Nakatani said Indonesia was Sanyo's largest production base for digital cameras with an annual output of some six million units.

Despite a gloomy forecast, he pledged the firm would avoid discharging workers in Indonesia. (dis)

Popular

RI, Australia strengthen partnership on taxing crypto assets

Analysis: Indonesia denies normalization with Israel to enter OECD

Citroen to produce electric cars in Indonesia