Up-hill battle for domestic producers of medical goods

Irawaty Wardany, The Jakarta Post, Jakarta

Local producers of medical goods said Tuesday they could not compete with imported products unless the government reduced import duties on required components.

"There used to be five disposable syringe producers operating in the country but now there are only two ... due to tight competition with imported products, especially from China," Paulus Novianto from Jaya Mas Medica said Tuesday.

Jaya Mas Medica is a producer of disposable syringes.

Paulus said his company could barely compete with Chinese products because their prices were some 30 percent cheaper than domestic products.

"Our products still use 60 percent imported components, which have import duties ranging from five to 15 percent," Paulus said.

"On the other hand, the government imposes zero percent duties for imported products.

"How can we compete with such condition."

Paulus said plastic materials attracted a 10 percent import duty, gaskets five percent and wrapping paper five percent.

"There are some local producers of the components but their production does not meet our needs," Paulus said.

Secretary general of the Association of Indonesian Health Equipment Producers, Ade Tarya Hidayat, asked his colleagues to focus on low-tech equipment first, including rubber gloves and hypodermic needles, because these were in high demand.

"It will be difficult for us to sell high-tech equipment because we have yet to be advanced in that sector," Ade said.

But the domestic market potential for health equipment was Rp 9 trillion (US$971 million), he said.

Secretary of the Agency for the Assessment and Application of Technology (BPPT), Jumain Appe, said in his opening speech the national health equipment industry had not developed because the component industry could not support it.

Jumain also said the country needed a commitment from the consumers to use domestic products.

Robert Iman Sutedja from the Indonesian Hospital Association said it was difficult for them to use any domestic medical equipment, because most had not been standardized.

"There are currently some 7,000 (items of) health equipment produced in the country but only 20 of them have been standardized," Robert said.

Domestic producers should fulfill several requirements if they want consumers to use their products, he said.

"They should provide after-sales service, spare parts, on-time delivery, good quality and (offer) reasonable prices," Robert said.

If all these requirements could be fulfilled, producers would automatically use domestic products, he said.

Director of the Specialist Medical Service Building, Ratna Rosita Hendardji, said Indonesia was a potentially strong market for the production of medical equipment.

"There are 1,300 hospitals and almost 8,000 community health centers, but the producers do not provide the equipment they need," she said.

Deputy of the Agro Industry and Biotechnology Division at BPPT, Wahono Sumaryono, said Indonesian researchers were able to create new innovations around medical equipment.

"Unfortunately, most of (the) producers want an instant result, (but) developing new products will need time," Wahono said.

"This is the risk that most of the producers will not take."

At the end of discussion, speakers all agreed to work toward establishing a small team consisting of industry stakeholders.

They said team would compile all problems faced by the medical equipment industry sector and look toward finding a way out together.