Textile plants moving from West Java to Central Java<\/p>\n
JAKARTA (JP): Several small and medium producers of textile
\nand textile-related products in West Java are relocating their
\nfactories to Central Java where business costs are cheaper.<\/p>\n
The deputy secretary general of the Indonesian Textile
\nAssociation (API), Irwandy Muslim, said yesterday the relocations
\nwere also prompted by the West Java administration imposing too
\nmany regulations.<\/p>\n
He said high land prices in West Java made it expensive for
\ncompanies to expand their manufacturing facilities.<\/p>\n
\"The productivity of workers (in West Java) has also failed to
\nshow any significant improvement since the government increased
\ntheir wages,\" he said.<\/p>\n
He was speaking on the sidelines of a seminar on the
\nintegration of the Multi Fiber Agreement (MFA) with the World
\nTrade Organization (WTO) in 2005 and its impact on Indonesia's
\ntextile industry.<\/p>\n
The government increased the minimum wage level in all 27
\nprovinces by an average of 10.07 percent starting April 1.<\/p>\n
With the increase, the minimum monthly wage for a worker in
\nthe greater Jakarta area (Jakarta, Bogor, Tangerang and Bekasi)
\nand West Java now ranges between Rp 139,000 (US$58) and Rp
\n172,500.<\/p>\n
In Central Java it is Rp 113,000 and in Yogyakarta it is
\n106,500, which is also the lowest in the country.<\/p>\n
Irwandy said West Java's highly competitive market caused
\nsmall and medium industries in the province to lose their share.<\/p>\n
\"In Central Java, the domestic market is not saturated yet and
\nthe productivity of the workers is better,\" he said.<\/p>\n
The chairman of the Indotex Foundation, Chamroel Djafri, who
\nis a senior advisor to API, said the government's decision to
\nincrease the minimum wage had been \"very drastic\".<\/p>\n
He said government policies were among the many obstacles the
\ntextile industry faced.<\/p>\n
These obstacles should be resolved by the time the MFA is
\nintegrated with the WTO, Chamroel said.<\/p>\n
Chamroel said the services sector, which includes banking,
\ninsurance and trade services, was unable to provide enough
\nsupport for the textile industry.<\/p>\n
\"On the national scale, there are numerous inefficiencies
\ncaused by red tape, poor tax systems, legal and illegal fees and
\nsharp increases in utility costs like electricity, water and
\ntelephone services,\" he said.<\/p>\n
Sources at yesterday's seminar said the government was
\nplanning to waive guarantee funds imposed on industrial
\nmachinery.<\/p>\n
Many businesses, including those in the textile industry, have
\nreluctant to sell their old machinery because the prices would be
\nmuch lower than the guarantee fund that must be paid.<\/p>\n
Indonesia's textile exports in 1994 reached $5.65 billion and
\nincreased 7.26 percent in 1995 to $6.06 billion.<\/p>\n
In the January-November period of last year, exports reached
\n$5.8 billion, or 6.22 percent higher than the corresponding
\nperiod in 1995.<\/p>\n
Textile products make up 19.9 percent of Indonesia's
\nindustrial exports and 12.84 percent of the country's total non-
\noil exports.<\/p>\n
Indonesia's domestic market trades $8 billion worth of textile
\nand textile-related products a year.<\/p>\n
A lecturer at University of Indonesia's School of Economics,
\nMenner Tatang, said Indonesia's per capita textile consumption
\nwas increasing 5.7 percent a year.<\/p>\n
\"This is twice the growth of the world's average per capita
\ntextile consumption of only 2.8 percent a year ... This means the
\ntextile industry has a very bright outlook,\" he said.<\/p>\n
Yesterday's seminar presented several proposals to the
\ngovernment on Indonesia's preparation for the integration of the
\nMFA with the WTO.<\/p>\n
The integration will eliminate the quota system and textile
\ntrade will have to abide by and be supervised by WTO rules. (pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/textile-plants-moving-from-west-java-to-central-java-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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