API sees 2001 textile export to drop by 25%

Adianto P. Simamora, The Jakarta Post, Jakarta

The Indonesian Textile Association (API) on Friday said it expected the country's 2001 textile export to decline by 25 percent from US$8.2 billion last year particularly due to an economic slowdown in the main U.S. market.

"The local textile industry is very sensitive to the slowdown in the U.S economy because about 26.3 percent of its export goes to this country," API executive director Indra Ibrahim told The Jakarta Post.

Indonesia's textile export to the U.S. reached $2.1 billion last year. Textile is among of the country's major non-oil and gas export products, and the sector employs a great number of people.

Indra said that the prospect for 2002 remained gloomy as textile companies had yet to receive orders for January-April shipment, which in normal times were usually made starting October.

"We expect orders from the U.S. to significantly drop in the first quarter of next year," he said.

Indra, however, said that despite the declining export, textile companies would try to avoid laying off workers.

He said that the companies would pursue other cost-cutting measures such as reducing overtime work.

"They (textile companies) may decrease production first or reduce overtime work in order to survive the difficult time," he said.

Elsewhere, Indra said that there had been a growing list of local textile companies complaining of cancellation orders from the American buyers in the aftermath of the Sept. 11 terrorist attacks on New York and Washington, which deepens the world's economic uncertainty.

He said that the local textile firms were being forced to cut down their prices or would risk cancellation.