Adianto P. Simamora

Adianto P. Simamora
The Jakarta Post
Jakarta

The country's export revenue from textile and textile products
is expected to decrease by 10 percent this year from US$7.6
billion last year because local products cannot compete in export
markets, according to the Indonesian Textile Association (API).

Associate chairman Benny Soetrisno said that many buyers in
the world's largest textile markets -- the United States and
Europe -- had switched to products made in other countries
because the prices of Indonesian textiles had become less
competitive.

"We can't compete in those markets anymore, our products are
now more expensive than in other countries," Benny told The
Jakarta Post over the weakened.

Indonesian textiles and textile products have become more
expensive because the industry mostly uses antiquated production
equipment.

Indonesia booked a record Rp 8.2 billion in the exportation of
textiles and textile products in 2000, but exports slipped to
$7.6 billion the following year.

API earlier predicted this year's textiles exports would reach
$8 billion after Minister of Industry and Trade Rini Soewandi
announced that the industry would be included in the government's
revitalization program announced last February.

Under the planned program, the government was to help secure
funds to the ailing textile industry to upgrade dated machinery
so that manufacturers could boost production and improve
efficiency.

However, the program has not run as expected because the
government has failed to seek new investors to fund the program.

Domestic banks, meanwhile, are reluctant to provide capital,
worrying that manufacturers will not be able to repay their
debts.

API said that about 60 percent of the existing textile
machinery was more than 15 years old, which increased production
costs.

"With such facilities, it will be difficult for Indonesia to
compete with other countries, such as China, Thailand and other
ASEAN countries," he said.

Benny also said the recent increase in fuel prices,
electricity rates and the minimum monthly wage had further
undermined Indonesia's textile export performance, as they
increased the financial burdens of many companies and pushed up
the prices of their products.