Footwear producers lament higher raw material prices<\/p>\n
JAKARTA (JP): Manufacturers of plastic sandals in East Java
\nhave been complaining about the rising price of polypropylene,
\nwhich has increased by up to 10 percent over the last few months.<\/p>\n
The manufacturers contend that higher prices for
\npolypropylene, a raw material used to make plastic footwear, are
\nbound to lead to declining sales.<\/p>\n
Chairman of the East Java chapter of the Federation of
\nIndonesian Footwear Manufacturers, Ari Soetrisno, was quoted by
\nthe Jawa Pos daily as saying that the rising prices of
\npolypropylene had a significant impact on members of the
\nfederation, which consists mostly of home industries and small-
\nscale factories.<\/p>\n
However, Ari said, because home industries use finished raw
\nmaterials -- which contain materials other than polypropylene --
\ntheir higher prices cannot simply be blamed on costlier
\npolypropylene.<\/p>\n
\"Because propylene has been blended with other materials
\nbefore the chemical is sold as an industrial material for
\nfootwear companies, the industrial users might not realize that
\nthe higher prices they pay for their material was caused by
\ncostlier polypropylene,\" Ari said.<\/p>\n
The government earlier this month decided to impose a 20
\npercent surcharge on propylene imports -- the raw material for
\npolypropylene -- on top of the current five percent duty.<\/p>\n
The ruling contradicted the government's earlier statement to
\nnot give tariff protection, tax incentives or regulatory
\nprotection to PT Chandra Asri Petrochemical Center, the country's
\nfirst olefin plant.<\/p>\n
In 1994, Chandra Asri asked the government for tariff
\nprotection against imported olefin products, including propylene.
\nThe call sparked vigorous public debate.<\/p>\n
Chandra Asri's propylene is used mainly by PT Tri Polyta
\nIndonesia to make polypropylene.<\/p>\n
Chandra Asri is jointly owned by the Barito Pacific, Bimantara
\nand Napan groups -- all believed to wield strong political clout
\n-- and Japan's Marubeni Corp. The first two groups also control
\nTri Polyta, a publicly listed company.<\/p>\n
Economists have spoken out against the surcharge, saying that
\nthe government should not sacrifice the competitiveness of
\ncompanies at the downstream level by developing -- through
\nprotection -- the upstream industry. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/footwear-producers-lament-higher-raw-material-prices-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}