Indonesia’s Air Conditioning Sector Grapples with Import Restrictions, Domestic Compressor Production Yet to Catch Up

JAKARTA – The Indonesian Refrigeration Company Association (Perprindo) is facing uncertainty following the imposition of import bans and restrictions on electronic goods, including crucial raw materials vital for domestic production. Technical considerations (Pertek) mandated as a prerequisite for import endorsements by Minister of Industry Regulation No. 6/2024, derived from Minister of Trade Regulation 3/2024, have sparked concerns among industry stakeholders due to perceived deficiencies in its implementation. Darmadi Durianto, Chairman of Perprindo’s Board of Trustees, lamented the prolonged duration of Pertek application processes, which were intended to be completed within 5 working days. This delay has left many entrepreneurs in limbo, hindering the procurement of essential components such as air conditioner (AC) compressors, which are not yet domestically manufactured. Perprindo has called for a reassessment of the Pertek mechanism, citing its disorderliness. “It is counterproductive for the government to restrict AC imports to bolster the domestic industry when the industry itself lacks readiness,” remarked Darmadi to Bisnis on Wednesday (17/4/2024). Darmadi highlighted Indonesia’s absence of compressor plants, necessitating AC manufacturers to rely on imports for local production. He argued that import restrictions would deter investment due to domestic raw material scarcity compounded by lengthy import licensing procedures. “We suggest that to enhance the effectiveness of Minister of Industry Regulation 6/2024, the government must support the establishment of supporting AC production industries such as compressor plants in Indonesia,” he urged. Currently, Darmadi appealed