API paints bleak outlook for textile industry<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The outlook for the country's textile industry is expected to
\nremain bleak next year, due to a combination of the global
\neconomic slowdown and higher production costs, according to the
\nIndonesian Textile Association (API).<\/p>\n
\"From my point of view, we will face difficult times and
\ngloomy prospects next year,\" Indra Ibrahim, API executive
\ndirector, told The Jakarta Post on Wednesday.<\/p>\n
With both export and domestic markets showing only a little
\nimprovement, he said, it would be an uphill task for the textile
\nindustry just to survive.<\/p>\n
Total export volume for 2002 is predicted to stand at 1.35
\nmillion tons, or some 10 percent lower than that of this year's
\nestimated 1.5 million tons.<\/p>\n
After showing a remarkable performance in 2000, in which it
\namassed US$8.2 billion in exports, the industry experienced a
\nsharp downturn this year with a decline in total export value
\nreported to reach 20 percent.<\/p>\n
The economic slowdown worldwide, signaled by the shaky
\nperformance of the world's major economies including Japan and
\nthe U.S., was mostly to blame for the disruption in market
\nsentiment for exports.<\/p>\n
The Sept. 11 suicide attacks on the U.S., Indonesia's main
\nexport destination, have only made it worse. The U.S. market
\nabsorbs some 26.5 percent of the country's textile products
\nvalued at $2.1 billion per year.<\/p>\n
With other major markets such as Japan and Europe also facing
\ndomestic problems of their own, Indonesia is running out of
\nalternate markets to shift its export destination.<\/p>\n
With recession set to trap Japan, and a weaker Euro currency
\nagainst the American dollar, this will further hamper their
\nappetite for imported goods.<\/p>\n
Turning to the domestic market is also not the best option,
\naccording to Indra, because of the low purchasing power of the
\npeople.<\/p>\n
The increase in fuel and electricity prices will add to the
\nproblem with the consequent rise in production costs.<\/p>\n
Producers have estimated, the rise in fuel and electricity
\nrates will cause an increase of more than 10 percent in the total
\noperating costs of most textile companies.<\/p>\n
The textile industry is not only the country's largest foreign
\nexchange earner but also the largest job provider, absorbing no
\nless than 1.2 million workers.<\/p>\n
The implementation of the ASEAN Free Trade Area (AFTA),
\nstarting next January, will also place the country's strategic
\nsector at a bigger risk.<\/p>\n
Under AFTA, the flow of goods including textile products
\nwithin ASEAN's founding member countries, which include Malaysia,
\nSingapore, Cambodia, Brunei, Indonesia, Laos, Myanmar, the
\nPhilippines, Thailand and Vietnam, will be free of tariff and
\nnontariff barriers.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/api-paints-bleak-outlook-for-textile-industry-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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