Indonesia losing competitive edge in world textile<\/p>\n
JAKARTA (JP): Local textile producers say Indonesia's textiles
\nand textile-related products have lost their competitive edge on
\ninternational markets due to their high production costs.<\/p>\n
They explained at a hearing with Commission VI of the House of
\nRepresentatives yesterday that components supporting the high
\ncosts include rises in electricity rates, interest rates, labor
\nwages as well as raw material prices.<\/p>\n
The producers represented at the hearing, chaired by Oedianto
\nof the Armed Force faction, included PT Texmaco Jaya, PT Argo
\nPantes, PT Great River Industries and PT Leading Garment
\nIndustries -- all listed on the Jakarta Stock Exchange.<\/p>\n
Syafioen of PT Great River said the most irritating element in
\nthe production costs is this month's 7.6 percent hike of
\nelectricity billing rates, which will be followed by periodic
\nrate increases every three months, while the services provided by
\nthe state-owned electricity company PT PLN are still bellow par.<\/p>\n
\"Look how many losses we bear because of sudden power black-
\nouts,\" Syafioen said. \"On the one hand, we are fined if we are
\nlate in paying our electricity bills. But when there are black-
\nouts, nobody can fine PLN. Is that fair?.\"<\/p>\n
Musa of Argo Pantes said the country's high interest rates
\nhave put textile companies in difficulties. \"Our interest rates
\nare among the highest in Asia,\" he said.<\/p>\n
He proposed that the government help find bank credits with
\nlower rates for export-oriented textile producers so that
\nIndonesia could better compete against new emerging textile
\nexporting countries, such as China, India, Bangladesh, Sri Lanka
\nand Vietnam.<\/p>\n
Labor<\/p>\n
Eddy T.P. Yo of Leading Garment specified that current labor
\ncosts in Indonesia are the highest among the emerging countries.<\/p>\n
He explained that labor costs in Indonesia are US$0.40 per
\nhour, as compared to $0.20 in China and only $0.10 in Vietnam,
\nwhile the productivity of Indonesia's laborers is the lowest
\namong the three.<\/p>\n
Commenting on the government's plan to increase the local
\nminimum wages by 15 percent to Rp 4,350 ($2) per day for the
\ngreater Jakarta area next year, Eddy predicted there would be a
\nnumber of companies going out of business.<\/p>\n
A number of legislators at the commission contended that the
\ngovernment-set wage standards have to be enforced properly and
\ntextile producers should support them because they are meant to
\nraise the welfare of workers.<\/p>\n
\"I personally support the government's move to raise the
\nwelfare of workers, but please understand our conditions as well
\nbecause we are plundered everywhere,\" Eddy said, responding to
\nthe legislators' contention.<\/p>\n
He did not explain the plundering but many businessmen have
\ncomplained that they have to pay illegal levies for various
\nbureaucratic procedures.<\/p>\n
He said local textile producers also have to bear the sharp
\nincreases of raw material prices, which average at 30 percent
\nannually, while the annual increases of their sale prices average
\nonly five percent.<\/p>\n
During the first six months of this year, Indonesia's exports
\nof textiles and textile-related products declined by 8.5 percent
\nto $3.3 billion from the same period last year.<\/p>\n
Chamroel Djafrie of the Indonesian Textile Association said
\nrecently that textile exports have recovered from the set-backs
\nduring the second semester of this year. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indonesia-losing-competitive-edge-in-world-textile-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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