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3. COMPETITION IN THE SPRING BED BUSINESS QUITE TOUGH.

Into the year 2000, the competition in the spring bed business is expected to be increasingly tight. This is indicated by the fact that there are already a high number of different spring bed brands available on the domestic market. At present, according to data with Data Consult, there are at least 20 producers operating in the spring bed industry, which is categorized as a household appliance industry.

Spring beds are originally foreign products, and they are made of spunbond, dacron (fiber fill), PU foam, cotton sheet, spiral springs, edging frame, and triple coil supporting. These basic components are put together using an automatic machine. Many spring-bed producers in Indonesia adopt the production technology from the principals and adjust it to the consumers' taste.

A spring bed is not only more comfortable but also more durable than an ordinary bed because it is made of high-carbon steel sprins which can withstand the weight of a human body for a long time.

Nowadays, the spring bed industry grows impressively. The domestic demand for spring beds continues to rise with improvements in the people's income. Spring beds are produced not only for households but also for international hotels.

Generally, spring beds are designed on the basis of the technology owned by the producer. "Guhdo" spring beds, for example, are designed using the "Bonnel" technology from Switzerland. To ensure sleeping comfort, a "Guhdo" spring bed uses between 125 and 188 interconnected spiral springs per square meter, depending on its category and type.

Meanwhile, a "Cosisoft" spring bed uses 150 spiral springs per square meter. These steel spiral springs are interconnected with one another in an unknotted coil system, which ensures minimum bumpiness/jolt wheal the person sleeping on it moves. According to some information, the unknotted coil system is produced using an automated method and has been well-tested in Europe, the U.S.A., and Australia.

The pioneer of Indonesia's spring bed industry is PT Dunlopillo Indonesia, which started to produce spring beds in 1970. Initially, this company only exhibited Dunlopillo products which were imported from Malaysia. In view of the high domestic demand for spring beds and of the shift in the use of beds among people in large cities, PT Dunlopillo Indonesia finally established a spring bed factory in Bekasi, West Java. Up to now, PT Dunlopillo has been producing spring beds under license from Dunlop of England.

PT Furintraco, which produces "Stallman" spring beds, initially employed expatriates from Italy to control the quality of its products. Eventually, when the company had acquired the capability of producing spring beds of international quality standard, it terminated its contract agreement with these expatriates. According to a source with PT Furintraco, although the components are still imported from Italy, the company modifies these components.

PT Duta Abadi Primantara, which produces "Florence" spring beds, uses American technology. The company's plant is located in Tangerang, West Java. Meanwhile, PT Tanditama Mandiri --which produces "Guhdo" spring beds-- uses Swiss technology. Besides spring beds for households, the company also produces spring beds for hotels.

PT Master Spring Bed, whose plant is located in Bogor, West Java, produces "Master" spring beds. With its head office located in Kelapa Gading Permai, Jakarta, PT Master Spring Bed markets its products through its showroom in Plaza Indonesia. The corn .party produces three types of spring beds. The luxury type, for example, has three size categories as follows: 160 cm x 200 cm, which sells for Rp 990,000 per unit; 180 cm x 200 cm, for Rp 1.1 million per unit; and 200 cm x 200 cm, for Rp 1.2 million per unit, exclusive of the prop.

PT Dufabuana Kreasi, whose plant is located in Bekasi, West Java, not only produces "Liberty" spring beds but also markets "Federal" spring beds.

PT Karvin Artamas, whose plant is located in Surabaya, East Java, produces "Potenza" spring beds. The company produces its spring beds using a combination of technologies from Indonesia, Japan, and Taiwan. How these technologies are combined together depends on the specifications desired by the buyer. Although many spring bed producers use foreign technologies, PT Indofibre Mattres Industry --whose plant is located in Surabaya, East Java- uses a local technology, which the company has developed on the basis of the results of some research which it conducted in Indonesia. Among the components used by the company to produce its "Everdream" spring beds are latex and coconut fibre.

In addition to the spring bed producers mentioned earlier, there are still a considerable number of spring bed producers and they produce different brands which are available on the market such as Olympic, Elegant, Elite, Ligna, Rama, Harmonis, and others.

New breakthrough

Amidst the many spring bed brands available on the domestic market, PT Pan Buana Utama Sejahtera markets magnetic spring beds which are manufactured by Japan Life Sleeping System of Japan. One leading feature of these magnetic spring beds is that they have a magnetic field which not only ensures sleeping comfort but also is good for health. These magnetic spring beds are of four types, and their market segment is high-income people. Their price varies from Rp 3 million to Rp 10 million/unit.

In view of the fact that spring beds are expensive while consumers are turning theft back to wooden beds, PT Merdi Mahayana has made a new breakthrough, namely beds that are made of iron pipe and plate. These beds are called bunkbeds, and their price are affordable to people of middle-lower income.

A bunkbed offers a number of advantages: it does not take much space; it is easy to dismantle and to put together; and it has a strong construction. PT Merdi Mahayana markets its products mainly through exhibitions although this company has a number of showrooms in Jakarta. The price of a bunkbed varies from Rp 98,000 to Rp 700,000/unit.

According to some information, PT Merdi Mahayana--whose plant is located in Lippo City Cikarang, West Java--has the capacity to produce 2,000 units of bunkbeds per month. The company only produces such components and iron constructions as scaffolding, multibeam, pipe support, and steel & fire doors. The iron pipe is supplied by PT Pabrik Pipa Indonesia, which is affiliated to PT Merdi Mahayana itself, and the iron plates are supplied by PT Krakatau Steel.

Prices vary widely

The prices of spring beds vary widely according to the type and size. Spring beds are marketed not only through distributors but also through appointed dealers. In Jakarta, the most expensive spring bed brand is "Romance." "Romance" spring beds of the pocket silver spring 400 type are offered at Rp 2.3 million per unit for size 200 cm x 200 em and at Rp 1.5 million per unit for size 160 em x 200 cm. "Alga" spring beds of the same size are offered at, respectively, Rp 1.7 million and Rp 1.4 million/unit.

The cheapes spring bed brand is "Federal," which is produced by PT Dufabuana Kreasi. "Federal" spring beds of size 160 cm x 200 cm are offered at Rp 521,500/unit while "Guhdo" spring beds of the same size are sold at Rp 755,000 per unit.

The prices of spring beds for hotels also vary. "Master" spring beds, which are produced by PT Master Spring Bed, are offered at Rp 900,000/unit for size 160 cm x 200 cm, Rp 1,100,000/unit for size 180 cm x 200 cm, and Rp 1,210,000/unit for size 200 em x 200 cm. These prices are exclusive of a 10% VAT, and they are subject to changes.

Table - 1 Some spring bed producers in Indonesia, 1997
Name of company Location of plant Brand

PT Dura Abadi Primantara Tangerang, West Java Florence
PT Furintraco Bekasi, West Java Stallman
PT Karvin Artamas Surabaya, East Java Potenza
PT Indofibre Matress Surabaya, East Java Everdream
PT Dunlopillo Bekasi, West Java Dunlopillo
PT Samudra Indoperkasa n.a Romance
PT Dufanbuana Kreasi Bekasi, West Java Liberty,
 Federal
PT Master Spring Bed Kedung Halang, Bogor Master
Top From Spring Bed Jakarta Nasional
PT Matrastama Maestro n.a Cosisoft
PT Tanditama Mandiri Tangerang, West Java Guhdo
PT Alga Jaya Rays n.a Alga
PT Slumberland Indonesia Tangerang, West Java Slumberland



Source: Data Consult

Table - 2 Spring bed prices in Jakarta, 1997

(per unit)
Brand Size Price

Romance 120 cm x 200 cm Rp 1,080,000
(Pocket silver 360) 160 cm x 200 cm Rp 1,420,000
 180 cm x 200 cm Rp 1,530,000
(pocket silver 400) 200 cm x 200 cm Rp 2,280,000

Alga 160 cm x 200 cm Rp 1,476,360
(Standard) 180 cm x 200 cm Rp 1,607,000
 200 cm x 200 cm Rp 1,767,960

Dunlopillo 160 cm x 200 cm Rp 850,000
(Standard) 180 cm x 200 cm Rp 950,000
 200 cm x 200 cm Rp 1,054,000

Liberty 100 cm x 200 cm Rp 740,000
(Super deluxe) 120 cm x 200 cm Rp 850,000
 160 cm x 200 cm Rp 1,090,000

Federal 120 cm x 200 cm Rp 415,000
(Standard) 160 cm x 200 cm Rp 521,500
 180 cm x 200 cm Rp 557,000
 200 cm x 200 cm Rp 607,000

Master 160 cm x 200 cm Rp 900,000
(Hotel bed) 180 cm x 200 cm Rp 1,100,000
 200 cm x 200 cm Rp 1,210,000

Guhdo 160 cm x 200 cm Rp 755,000
(Standard) 180 cm x 200 cm Rp 820,000
 200 cm x 200 cm Rp 910,000

Jumbo 160 cm x 200 cm Rp 533,000
(Standard) 180 cm x 200 cm Rp 607,000
 200 cm x 200 cm Rp 695,000



Source: Data Consult3
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Comment:3. COMPETITION IN THE SPRING BED BUSINESS QUITE TOUGH.
Publication:Indonesian Commercial Newsletter
Geographic Code:9INDO
Date:Sep 22, 1997
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