Electrification Ratio in Indonesia Up, Demand for Light Bulbs Rises
Demand for lighting in Indonesia will rise in line with the rising electrification ratio (the percentage of households that are connected to the nation's electricity grid). Indonesia's electrification ratio stood at 85 percent in 2015, implying there are still around 40 million Indonesians that do not have instant access to electricity. The government is eager to raise the electrification ratio and this means that demand for lighting should grow accordingly. However, a large portion of lamps/lighting that is sold in Indonesia is still imported from abroad. As such, there should be lucrative business opportunities in Indonesia's lighting industry.
John Manoppo, Chairman of the Indonesian Electrical Lighting Industry Association (Aperlindo), said that sales of light-emitting diode (LED) in Indonesia rose 50 percent (y/y) to 60 million LED bulbs in 2015 from 40 million one year earlier. Meanwhile, sales of (non-LED) energy-efficient light bulbs were stagnant last year at 340 million sold bulbs. Without mentioning exact figures, Manoppo said a large chunk of these bulbs are imported from abroad, particularly from China as both countries signed a mutual recognize agreement (MRA) that cut import tariffs for LED and other energy-efficient lighting to 5 percent. Therefore, it is cheap to import lighting bulbs from the world's second-largest economy.
Manoppo is planning to request the Indonesian government to raise the import tariff for LED bulbs to the range of 15 - 25 percent. Higher import tariffs causes more expensive imports and this should boost investment into the domestic lighting bulb manufacturing industry of Indonesia. I Gusti Putu Suryawirawan, Director General of Metal, Machinery, Transportation Equipment and Electronic Industries at Indonesia's Industry Ministry, said that the Ministry has not yet received the request from Aperlindo. He did inform that such a request would be studied by the Ministry when received.
In 2015 the Indonesian government unveiled its program to develop 35,000 MW of additional power generation capacity (the majority of which coal-fired) by 2019. This program not only aims to add households to the nation's electricity grid (there are currently still 12,659 villages in Indonesia that lack access to electricity) but also to supply more electricity to those regions where demand is high and supply is inadequate. In many regions of Indonesia power shortages are a daily phenomenon and causes turmoil in the production process of local industries.
This ambitious government plan will give rise to higher demand for bulbs in Indonesia. Manoppo said demand for LED bulbs in particular will rise as these LED light bulbs are more durable and longer lasting, hence having become a popular solution to lighting matters.
LED Bulb Manufacturers in Indonesia:
| Company |
| Gunawan Elektrindo |
| Honoris Industry |
| Ningbo Global Lamp |
| Pancaran Indonesia |
| Sentra Solusi Elektrindo |
| Sinko Prima Alloy |
| Sinar Angkasa Rungkut |
| Dian Satellite Unggul |
| Tjipto Langgeng Abadi |
Source: Kontan