The Jakarta Post
Indonesia is looking to China and South Korea to become the country’s main suppliers of medical equipment as countries worldwide scramble for supplies amid the rapid spread of the novel coronavirus.
The government expects South Korean and Indonesian companies to produce test kits and personal protective equipment (PPE) in Indonesia, while China’s enterprises have been importing test kits, ventilators and medical-grade PPE, such as N-95 masks.
“We are taking coordinative steps between industries, factories and the State-Owned Enterprise (SOE) Ministry to obtain materials,” Investment Coordinating Board (BKPM) chairman Bahlil Lahadalia told a broadcasted video conference on Tuesday, citing air cargo to expedite shipping.
Demand for materials to produce medical supplies are spiking, as industries change and ramp up their production lines to mass produce medical and protective equipment. The Group of 20 (G20) major economies has also pledged to create a supportive global supply chain in addressing the global deficit of medical equipment and protective gear, primarily PPE, test kits and ventilators.
“The United States obtained raw materials in China in a way that’s like ‘if you have the money, we have the products’. If we are late to order, we can’t secure orders. This happened a few days ago when an industry player was late to place a down payment and then US took the orders. We don’t want this to happen, so we support their airplanes, maybe from SOEs, so production can carry on,” Bahlil said.
To better secure medical supplies, Coordinating Economic Minister Airlangga Hartarto engaged in a bilateral call with South Korean Trade Minister Yoo Myung-hee on Monday to discuss a potential collaboration that includes joint test kits and PPE production.
South Korean biotechnological companies Kogene Biotech and Seegene could run a joint production with Indonesian companies to produce test kits in Indonesia, Airlangga said. In addition, he also said the two countries would cooperate in producing PPE, with the raw materials imported from South Korea and the manufacturing carried out in Indonesia.
“We are also grateful for the South Korean government’s US$500,000 in-kind grant to the Indonesian government, which will be used to support the fight against the COVID-19 outbreak,” Airlangga said.
South Korean Trade Minister Myung-hee also said his side had listed Indonesia as among prioritized countries to receive exports of medical equipment, alongside the United States and the United Arab Emirates, according to a press release from the Office of the Coordinating Economic Minister.
On Friday, 500,000 protective gowns were sent to various regions in Indonesia from a production consortium between PT GA Indonesia and five South Korean garment companies that operate in West Java. The consortium is producing PPE after obtaining production certification from the government and raw materials from South Korea, according to the BKPM.
South Korean industrial conglomerate LG, known for its electronics subsidiary LG Electronics, will also ship 50,000 polymerase chain reaction (PCR) test kits as a donation to Indonesia.
Despite its manufacturing capacity to produce PPE, Indonesian companies are struggling to manufacture medical-grade gear, which only account for 6.5 percent of their protective gear capacity, Industry Ministry data shows. Indonesian manufacturers have yet to domestically produce their own ventilators and test kits, although several local companies are moving toward producing them.
There are 35 Indonesian manufacturers preparing to produce, together, about 18.3 million pieces of protective gear per month by early May, according to the Industry Ministry. That compares with a monthly domestic demand of up to 16 million, potentially leaving room for exports in case of an excess.
“Insya Allah [God willing] we will be able to export the excess production, and with the world in need of PPE, we could use the exports as a bargaining chip to acquire ventilators from producing countries. We’ll send them PPE and they'll send us ventilators in return,” Industry Minister Agung Gumiwang Kartasasmita.
To produce PPE, textile industries in Indonesia mainly source their materials from China, Indonesian Chamber of Commerce and Industry (Kadin) vice chairwoman for international relations Shinta Kamdani said.
“The majority of imports came from China, as they are able to supply the market demand. Maybe other countries also produce them but China has a major supply and is willing to export,” Shinta told The Jakarta Post over the phone.
Indonesia also imports test kits, ventilators and medical-grade PPE, such as N-95 masks from China, Shinta said, despite various countries’ concerns over the equipment quality.
Last week, the Dutch government recalled 600,000 masks out of a Chinese shipment of 1.3 million that did not meet quality standards. Spain also rejected thousands of rapid test kits sent by an unauthorized Chinese company after it found that they were unreliable last week.
Chinese officials hit back on Sunday at media reports over defective medical supplies, saying that they "did not reflect the full facts". China has exported 3.86 billion masks, 37.5 million pieces of protective clothing, 16,000 ventilators and 2.84 million COVID-19 test kits since March 1, according to the country’s customs official.
Shinta said Indonesia did not have the luxury of picking and choosing its imports of medical equipment and material, as every country was taking what they could to fulfill their demand for PPE and medical equipment. “The most important thing right now is how we are able to import the products as quick as possible,” she added.