In Central Java Many producers change profession<\/p>\n
Blontank Poer, Correspondent, Semarang<\/p>\n
The world's economic slowdown and a further decline in
\noverseas orders following the terrorist attacks on the United
\nStates on September 11 last year have exacerbated the problems
\nfacing the country's textile industry.<\/p>\n
Textile producers in Central Java, one of the country's four
\nmajor textile producers, the others being Jakarta, West Java and
\nEast Java, have not been immune to the downturn.<\/p>\n
Many textile producers in the province have even considered
\nbecoming traders because running a manufacturing business is
\ndeemed no longer profitable.<\/p>\n
\"Many friends in the textile manufacturing industry are
\nconsidering changing their profession to traders. Becoming a
\ntrader might be more profitable at present as imported products
\nsuch as those from China are much more competitive in the local
\nmarket,\" said Setiawan Santoso, the owner of garment producer PT
\nRodeo.<\/p>\n
According to him, the decline in overseas demand has forced
\nmany garment producers in Central Java to cut production.
\nAlthough some of them are able to survive, most are in a critical
\nsituation.<\/p>\n
Setiawan said that some textile companies had managed to
\nmaintain their activities thanks to the help from larger textile
\nfirms, which sub-contracted part of their orders to smaller
\nfirms. \"But the situation has changed following the terrorist
\nattack against the World Trade Center (WTC) in September last
\nyear. Many buyers have canceled their orders,\" he said.<\/p>\n
Separately, the chairman of the Central Java chapter of the
\nAssociation of Indonesian textile producers (API), Andi Sanang
\nRomawi, said that falling overseas demand was not the only factor
\ncontributing to the local garment producers' difficulties. He
\nsaid that low domestic demand was also part of the problem.<\/p>\n
\"The decline in people's buying power due to the country's
\neconomic crisis remains a major problem in the domestic market,\"
\nsaid Andi, who is also the president of PT Damatex Salatiga.<\/p>\n
Security concerns have also contributed to the fall in
\noverseas demand. The threats of \"sweeping\" operations made by
\nMuslim radicals against American citizens following the start of
\nthe U.S.-led strike against Afghanistan are still having an
\nimpact today.<\/p>\n
Andi said that many overseas buyers had suspended their
\nIndonesian orders out of fear that the sweepings could
\nmaterialize and affect shipments. Indonesian buyers have switched
\nto other Asian countries such as Singapore, Thailand, China and
\nVietnam to ensure prompt delivery.<\/p>\n
According to him, the utilization of the province's textile
\nproduction capacities has dropped to about 60 percent due to the
\nfall in the demand.<\/p>\n
\"Major textile companies suffered a drop in sales by about $1
\nmillion each last year,\" he added.<\/p>\n
Bambang Priyono, the head of the foreign trade department of
\nthe provincial office of the Ministry of Industry and Trade, said
\nthat many overseas importers had chosen to buy from China,
\nVietnam or Bangladesh because Indonesian textile products were
\ntoo expensive.<\/p>\n
\"The production costs in those countries are lower than those
\nin Indonesia. No wonder their garment products are cheaper,\" he
\nsaid.<\/p>\n
The province's textile exports have shown steady growth over
\nthe past four years. According to the province's industrial and
\ntrade office, exports of textiles and textile-related products
\nrose from US$586.76 million in 1998 to $596.86 million in 1999
\nand again to $730 million in 2000. The data for 2001 exports are
\nnot yet available but the association estimates a drop in the
\norder of 30 to 50 percent.<\/p>\n
Setiawan, who is also the chairman of the local chamber's
\ndepartment for textile industries, said that garment producers
\nwho sell most of their products to the U.S. suffered most from
\nthe world's sluggish demand.<\/p>\n
\"Those who sell their products to Europe and the Middle East
\nare still able to survive. Orders from these countries still flow
\neven if with lower prices,\" he said.<\/p>\n
For major textile producers such as PT Apac Inti Corpora, the
\nlow demand did not really affect its business activities. The
\ncompany, which sells about 97 percent of its textile products to
\nthe U.S. and Europe, announced an expansion plan late last year
\ndespite the unfavorable market situation.<\/p>\n
Apac's finance director, Anas Bahwen, said that the company
\nplanned to invest about Rp 5 billion this year to boost
\nproduction.<\/p>\n
The chairman of the Central Java investment board, Yeru
\nSaliminto, believes that the textile industry remains promising
\ndespite the current difficulties.<\/p>\n
According to data issued by the investment office, at least 13
\nnew investors applied for permits to enter the textile sector.
\nSix of the new investment plans will involve foreign investors.<\/p>\n
Yeru said that in order to attract more investments, the
\nCentral Java administration planned to build two toll roads; one
\nlinking Surakarta and Yogyakarta, and another one connecting
\nSemarang and Surakarta.<\/p>\n
Meanwhile the head of the labor department of the local
\nchapter of the legal aid foundation (LBH), Tasi Denny Septiviant,
\nsaid that a number of companies had conducted massive lay-offs
\nlast year as they were unable to pay workers' wages. PT Colombo,
\nfor example, closed down operations and dismissed its 500
\nworkers. PT Dupantex laid off 1,750 workers.<\/p>\n
He believes the figures represent only a small portion of the
\nworkers laid off by textile companies in the province last year.<\/p>\n
Many companies did not report lay-offs to the local manpower
\noffice as around half the laborers working in the province's
\ntextile industries are temporary workers, he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/in-central-java-many-producers-change-profession-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}