Knitting businesses caught in a spiral of decline<\/p>\n
Yuli Tri Suwarni, The Jakarta Post, Bandung<\/p>\n
For over four decades, people living on Jl. Binong Jati, Binong
\nvillage, Batununggal, some 10 kilometers to the east of downtown
\nBandung, have been familiar with the noise of knitting and sewing
\nmachines.<\/p>\n
However, the machines have not been heard much over the past
\ntwo months. Yayah, 18, and the other five seamstresses working at
\nStudio 60, a knitting workshop owned by Andi Farida, 30, have had
\nvery little to do lately.<\/p>\n
They simply sit and chat, occasionally laughing while awaiting
\nthe next job. They may consider themselves lucky because some
\n4,000 contractual workers in over 120 household knitting
\nbusinesses in this area lost their jobs completely when the
\nbusinesses collapsed.<\/p>\n
These days are really tough times for the knitting businesses
\nin Binong Jati -- household industrial undertakings that came
\ninto being in 1965. The hike in the price of fuel and the
\ndepreciating the rupiah have dealt a lethal blow to some 400
\nsmall-scale businesses in this area, a situation similar to what
\nhappened in 1997.<\/p>\n
If you visit the area, you can see, on either side of the two-
\nmeter road, notices offering used knitting machines.<\/p>\n
"Purchasing power has weakened, while our stocks continue to
\npile up. The price of acrylic yarn, our raw material, has risen
\nfrom Rp 33,500 per kilogram to Rp 35,500 per kilogram in just
\nthree days. It's really a crisis," said Andi, who, following in
\nthe footstep of his father, started his own knitting business,
\nrelying on eight knitting and sewing machines.<\/p>\n
Owing to buyers' strapped finances, he said, vendors in Tanah
\nAbang market, who used to pay at least Rp 170,000 for a dozen
\npieces of trendy knitwear for teenagers, can pay him only Rp
\n160,000 to Rp 165,000 now. In fact, he added, production costs
\nhad increased.<\/p>\n
Sales have dropped by up to 50 percent. In the past, Andi
\nsaid, his weekly production stood at 60 dozen but in the past two
\nmonths it has fallen to 20 dozen to 30 dozen.<\/p>\n
Neng Eni, 26, is in the same boat. In the last two weeks, she
\nhas not received a single order from Surabaya or Surakarta,
\nresulting in a 40 percent sales drop. She, too, has been forced
\nto slash her prices from Rp 170,000 to Rp 200,000 per dozen to a
\nmaximum of Rp 165,000 per dozen. "I really don't know how to
\nmanage my money. Besides, my employees have asked for a pay rise.
\nI don't have the heart to lay them off. Well, I'd better wait
\nuntil the exchange rate of the U.S. dollar falls against the
\nrupiah," she said.<\/p>\n
Meanwhile, Suhaya Wondo, 32, a large-scale entrepreneur and
\nalso chairman of the knitting cooperative in the area, said that
\nbefore the crisis there were about 400 household knitting
\nbusinesses employing some 10,000 people, whose education level
\nranged from elementary school to senior high school.<\/p>\n
The businesses used 3,750 machines, each of which could
\nproduce a dozen knitted products a day, and needed some 450 tons
\nof domestically made acrylic yarn a month. Total turnover was
\nrecorded at Rp 20.25 billion per month.<\/p>\n
The purchasing power of the public, he said, dropped following
\nthe hike in the price of fuel last July, when the new school year
\nstarted in Indonesia. Obviously, as the fuel price hike caused
\nthe price of daily necessities to rise, many parents preferred to
\npostpone buying clothing and would rather spend their money on
\ntheir children's schooling.<\/p>\n
"The situation got worse following the government's
\nannouncement that it would again raise the price of fuel.
\nSuppliers and manufacturers responded by raising their prices.<\/p>\n
"We have really been squeezed while, at the same time, the
\ncentral government has announced it plans to jack up fuel prices,
\ntherefore prompting speculators to raise their prices," said
\nWondo. Due to an absence of orders, he has not, for the past
\nthree weeks, sold his products to the vendors in Tanah Abang.<\/p>\n
The present situation is quite different to when Indonesia was
\nhit by the economic crisis in 1997. In contrast, despite the
\nonset of an economic crisis, Wondo and his fellow knitting-
\nbusiness owners enjoyed a boom in sales then.<\/p>\n
Although the rupiah has plummeted, he said, fuel prices had
\nnot increased and the demand for cheap clothing in the local
\nmarkets was high.<\/p>\n
Thousands of people who formerly relied on small-scale
\nknitting businesses in Binong Jati for their livelihood are now
\nunder stress as these businesses have become very sluggish.<\/p>\n
Besides, hundreds of food vendors, collectors of yarn waste
\nand cleaners will also lose their jobs. The government has yet to
\nmake an effort to address these problems, which grow more acute
\nby the day.<\/p>",
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