Restructuring of textile industry needs $505 million<\/p>\n
Zakki P. Hakim, The Jakarta Post\/Jakarta<\/p>\n
The national textile and textile articles industry needs at
\nleast US$505 million to \"restructure\" production facilities, said
\nthe Ministry of Industry and Trade in announcing the result of a
\nrecent survey on the industry on Monday.<\/p>\n
The survey, carried out by state-owned surveyor PT Sucofindo,
\nrevealed that nearly 20 percent of 4,109 companies surveyed from
\n2001 until July 2004 needed to rehabilitate or replace their
\nmachinery to continue operations or stay competitive, ministry
\ndirector of textiles and textile product industry Luky Hartini
\ntold a media conference.<\/p>\n
The remaining 80 percent claimed that they did not need such a
\nrestructuring program as their machinery was relatively new --
\nless than 10 years old.<\/p>\n
The survey was carried out as the government was willing to
\nhelp the industry, which was formerly a major contributor of
\nforeign exchange earnings to the nation but is now fighting hard
\nto survive competition against China and other, poorer nations.<\/p>\n
Luky said that the ministry would first focus the
\nrestructuring program on the finishing, weaving and spinning
\nsubindustries, whose products (fabric and yarn) were in the
\nhighest international demand in comparison with other Indonesian
\ntextile products.<\/p>\n
Yarn and fabric accounted for 43 percent and 23 percent of
\nIndonesia's export volume from 2001 and 2003.<\/p>\n
Luky went on that since the government had a limited budget,
\nthe ministry would assist the industry in finding ways to get
\nfresh funds from other sources, starting from national banks.<\/p>\n
The ministry said earlier that it had met with Bank Indonesia
\nlast week and requested the central bank review its policy of
\ndiscouraging private banks from funding the textile and apparel
\nproducts industry due to a large number of large bad loans in the
\nsector.<\/p>\n
BI requires a healthy industry to have nonperforming loan
\n(NPL) at under 5 percent, while the textile industry had an
\naverage NPL of up to 10 percent.<\/p>\n
\"Eventually, BI understood that not all players in the textile
\nindustry had bad debts, thus agreeing to review the policy and
\nencourage private banks to examine clients, instead of the sector
\nas a whole,\" said Minister Rini Soewandi recently.<\/p>\n
According to Rini, industry associations and private banks,
\nnamely Bank Mandiri, Bank Danamon, Bank Negara Indonesia 46 and
\nBank Rakyat Indonesia, would meet this week to discuss the
\ndetails.<\/p>\n
The Sucofindo survey showed that of the 774 textile
\nmanufacturers that need restructuring, 703 were garment makers,
\nwhich needed a combined $206 million and 36 were integrated
\ntextile producers needing $247 million. The remaining 35
\ncompanies were associated with spinning, weaving, knitting,
\nprinting, dyeing and finishing.<\/p>\n
Luky admitted the survey could not comprehensively illustrate
\nthe complete situation with regard to the nation's textiles and
\ntextile products industry, as some 10,000 companies were
\nregistered in the ministry, while only 4,109 of them participated
\nin the survey. Most of the participants (88.6 percent) were
\ngarment makers.<\/p>\n
Furthermore, she said that Sucofindo had sent questionnaires
\nto more than 6,000 companies, but only 4,109 responded. The other
\ncompanies might have been closed, changed business or fictitious.<\/p>\n
\"But we will exclude them (the nonresponding companies) from
\nour list of future programs,\" she said.<\/p>\n
As a follow-up on the survey, the ministry had asked Sucofindo
\nto produce a more comprehensive map of the national textile
\nindustry, Luky said.<\/p>\n
According to the ministry, the utilization of production plant
\ncapacity at the industry dropped significantly to 65.1 percent
\nlast year from 84 percent in 1999.<\/p>\n
The industry, which absorbs 1.2 million workers, was the
\nsecond-largest contributor of foreign exchange earnings among non
\noil and gas industries last year, after the electronics industry,
\nwith an export value of $7.03 billion or 16.22 percent of total
\nnon-oil and gas exports last year.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/restructuring-of-textile-industry-needs-505-million-1447893297",
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