T

his country 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 center for device manufacturing facilities, industry players said recently.

Janto Djojo, the marketing director with Cross Mobile, said Indonesia must have competitive values that will pull foreign investors in.

'€œMany [device manufacturing] factories choose to set up facilities in Vietnam,'€ Janto said, blaming complexities here for scaring away investors. Cross is a domestic mobile phones brand. However, the company sources the products from factories in China.

Meanwhile, the Industry Ministry last year announced the postponement of an investment plan by Taiwanese electronics manufacturer, Foxconn, a subsidiary of Hon Hai Precision Industry Ltd.

The ministry said the firm, which reportedly produces 40 percent of the world'€™s electronics for giant brands such as Apple, had yet to meet several requirements.

Aside from the issue of complicated requirements, the lack of factories that will support this industry is also a big concern.

Ben Siagian, the country manager of Qualcomm Indonesia, said the presence of an ecosystem of factories that provide an array of material needed in the manufacturing of devices was essential.

'€œThe city of Shenzhen in China emanates the scent of industrialization 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, the chairman of the Indonesian Computer Entrepreneurs Association (Apkomindo), said the smoothness of distribution in Indonesia was hindered by poor roads and clogged ports.

'€œThe maintenance of infrastructure 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.

Ben further added that although Indonesia was a large market for mobile phones, mobile phone makers would continue manufacturing their products in Vietnam and China if it was cost efficient.

'€œCompanies 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.

Gregory Lee, CEO of Samsung Asia Pte.Ltd., said that the South Korean electronics and device company had manufacturing facilities scattered across Southeast Asia.

Samsung runs one factory in Indonesia that manufactures set top boxes, televisions, home theaters, audio equipment and players for DVD and BluRay.

Their two factories in Malaysia manufacture televisions and microwaves whereas mobile phones come out of two factories in Vietnam.

'€œOur manufacturing plant in Vietnam is the largest for mobile phones,'€ he said during a visit to Jakarta.

However, he pointed out that Samsung sought to '€œgrow every one'€ of their facilities in the region.

'€œWe are focused on all our products. We have put significant investment in Southeast Asia and there are new businesses we would like to start,'€ she said.