The performance of Indonesia's bicycle
industry has been low due to the antidumping sanctions from the
European Union members. This condition is now worsened by the impact of the
current monetary turmoil. It is said that many bicycle producers have slashed
their production rates by up to 40%. As a result of the antidumping sanctions,
the domestic industry of bicycles has been losing its market share. The export
demand for Indonesian bicycles has continued to decline.
Out of the 29 bicycle companies existing in Indonesia with a combined
production capacity of 3.06 million units/annum, only 23 currently still
operate. Of these 23, only ten are members of the Indonesian Bicycle Producers'
Association (AIPI)
The largest bicycle producer in Indonesia is PT Java Perdana Bicycle Industry,
whose plant is located in Tangerang, West Java. Ibis company
`has an annual production capacity of 400,000 units. Established in 1989, PT
Java Perdana Bicycle Industry operates under the foreign investment (PMA) scheme and
produces bicycle under brand name `Centurion.' According to some
information, the company markets its products through a distributor called PD
Asean Jaya.
The second
largest bicycle producer is PT Wijaya Indonesia Makmur Bicycle Indonesia (WIM Cycle),
which was established in 1972. With an annual production capacity of 360,000
units, WIM Cycle supplies some 30% of its output to Europe, another 40% to the
USA, and the rest to other countries. Led by Hendra Widjaja, the company
markets its product under brand name "WIM Cycle."
PT Insera Sera --whose plant is located in
Sidoarjo, East Java-- has an annual production capacity of 180,000 units. This
company produces different types of bicycles such as MTB, ATB,
and City Bike and markets them under brand name `Insera.' According to some
information, some 50% of the company's output is exported and the rest supplied
to the domestic market.
PT Terang Dunia Internusa, which was established
in 1993, has an annual production capacity of 180,000 units. With its plant
located in Citeureup, Bogor, this company produces various types of bicycles
under brand name "United."
The other bicycle producers are spread over
different locations and they have annual production capacities of less than 150,000
units each.
It has been difficult for Indonesia's bicycle
industries to grow because it is faced with pressures on the international
market and with tight competiton on the domestic market. On the domestic
market, bicycle producers have to compete not only with one another but also
with home industries, which manage to offer products at relatively low prices.
Table - 1 Several bicycle producers in
Indonesia, 1996
Company Location of plant Brand
PT Jaws Perdana Bicycle Tangerang, West Java "Sentorion"
PT Toyo Asahi Bicycle Tangerang, West Java "Toyo"
PT Wijaya Indonesia Gresik, East Java "WIM"
Makmur Industry
PT Days Sakti Tangerang, West Java "Winner"
PT Insera Sena Sidoarjo, East Java "Insets"
PT Sinadi Sakti Surabaya, East Java -
PT Five Rams WBI Gresik, East Java "Amex","Puma"
PT Swasti Pandawa Armada Magelang, Central Java "Armada"
PT Terang Dunia Internusa Bogor, West Java "United"
PT Glantindo Utama Tangerang, West Java "Dignity"
Source: AIPI/Data Consult
Production up again
Indonesia's bicycle production has been fluctuating with the tendency to increase. For the
period of 1992-1996, it grew at an average annual rate of 24.1%. In 1993, it
reached 2.2 million units, which increased by 22.7% to 2.7 million units in
1994. In 1995, due to the antidumping sanctions, it declined by 52.2% to 1.3
million units. In 1996, according to a source with AIPI, Indonesia's bicycle
production grew to 2,800,000 units. For 1997, due to the monetary turmoil, the
bicycle industry is expected not to be able to achieve the 10% production growth
target.
Table - 2 Indonesia's bicycle production,
1992-1996
Year Production Growth
(000'units) (%)
1992 2,015 -
1993 2,156 7.7
1994 2,749 27.5
1995 1,313 -52.2
1996(*) 2,800 113.2
Average growth 24.1
(*) Tentative figures
Source: AIPI/Data Consult
Antidumping duties vary.
Apparently, the European Union's antidumping accusation to Indonesia's bicycle industry has had some negative
impact on its growth. This can be seen from the fact that its output has
declined and that a number of bicycle producers have gone bankrupt due to
failure in competition. A number of other producers have found themselves
compelled to turn to other countries for export opportunities.
PT Federal Cycle Mustika, which is affiliated to
the Astra Group and produces bicycles under brand name "Federal," has discontinued production. It is said that this company
has been taken over by WIM Cycle. However, no confirmation has been obtained
about such a report.
The antidumping duties applicable to Indonesian
bicycle producers vary from one company to another. PT Federal Cycle Mustika
and PT Toyo Asahi Bicycle Industry, for example, are subjected to a 29.4%
antidumping duty, PT Jawa Perdana Bicycle 27.7%, PT Wijaya Indonesia Makmur
21.9%, and other bicycle producers an average 29%.
Exports down
The volume of Indonesia's bicycle exports has
been fluctuating with the tendency to decline. In 1991, it reached 411.3
thousand units (worth US$ 22.2 million). For the past five years (1992-1996),
it reached its peak level of 562,590 units in 1994. In the following years, due
to the dumping accusation from the European Union, the volume of such exports
showed drastic drops. In 1996, it reached only 223,421 units (worth US$ 14.7
million), down 58.3% from from the previous year.
The bicycles which Indonesia exports can be
divided into two major categories: racing bicycles and other bicycles. Of these
two categories, the more exported is other bicycles. In 1996, as many as
222,920 units of such bicycles were exported and this figure accounted for
99.7% of the total. Only 501 units of racing bicycles were exported in 1996.
The high impact of the European Union's dumping
accusation to Indonesian bicycles is high because so far, Indonesia's bicycle
industry has relied on a few countries for export opportunities, and they are
the European Union, Japan, Canada, Australia, and the United States and because the European Union accounts for around 70%
of Indonesia's total bicycle exports.
Table - 3 Indonesia's bicycle exports, 1992 -
1996
Year Volume Value
(unit) (US$ '000)
1992 541,721 30,327
1993 508,296 31,203
1994 562,509 31,894
1995 535,581 31,231
1996 223,421 14,716
Source: CBS/Data Consult
Penetrating alternative markets
Due to the imposition of antidumping duties, a
number of Indonesian bicycle producers have been trying to further its
penetration into countries outside of the European Union. Among them, the ones
with the highest potential to import Indonesian bicycles are Japan and the
United States, where the ratio of bicycles to the population is nearly 1:1. In
1996, for example, Indonesia managed to export 52,345 units worth US$ 4.4
million to Japan. In the same year, the United States, Canada, and Saudi Arabia together imported 66,191 units, which accounted for
29.695 of Indonesia's total bicycle exports. The export opportunities for
Indonesian bicycles in these three countries seem to be good.
Table - 4 Indonesia's 1996 bicycle exports, by
country of destination
Country of Volume Value
destination (unit) (US$ '000)
Japan 52,345 4,361
Netherlands 41,128 2,709
USA 36,013 2,159
England 26,817 2,026
Canada 15,517 836
Saudi Arabia 14,661 237
Australia 9,361 1,042
Denmark 4,745 173
Others 22,744 1,173
Total 223,421 14,716
Source: CBS/Data Consult
COPYRIGHT 1997 P.T. Data
Consult, Inc.
No portion of this article can be reproduced without the express written
permission from the copyright holder.
Copyright 1997 Gale, Cengage
Learning. All rights reserved.
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