Closures in manufacturing sector on the rise: BPS

Closures in manufacturing sector on the rise: BPS

Rendi A. Witular, The Jakarta Post, Jakarta

As many as 650 large and medium-size manufacturing companies
closed down last year, while another 673 decided to downsize
their activities or merge with other companies, to cope with the
lingering economic crisis, according to government data.

A total of 226 firms merged last year, while 447 downsized,
the data stated.

Data from the Central Bureau of Statistics (BPS), made
available exclusively to The Jakarta Post, stated that in 2000,
the number of "inactive" firms reached 1,149.

The agency uses the term "inactive" to refer to companies that
close down, merge with other companies or downsize.

The data has painted a clearer picture of the grim situation
in the country's manufacturing sector, which has suffered the
brunt of the economic crisis.

The agency estimated that at least 100,000 workers were laid
off in the manufacturing sector last year, up from the estimated
87,370 the previous year.

The agency recently stated the country's full and part
unemployment had reached at least 38 million, while independent
analysts put the figure higher, at 40 million to 45 million.

The agency defines a large company as one that employs 100 or
more workers, while a medium firm has 20 workers to 99 workers.

Head of the BPS industrial statistical subsection Rifa Rufiadi
said that, based on the preliminary data collected by the agency,
the number of large and medium-size companies that became
inactive this year would likely be surpassed this year.

However, she declined to make an estimate, saying the agency
was still calculating it.

However, an official at the agency reckoned the likely total
to be 1,700 to 2,000 firms.

Labor-intensive sectors, such as textiles, garments and
leather goods topped the "inactive" list last year, at 349
companies, followed by food, beverage and tobacco (346), and the
wood, bamboo, rattan and willow sectors (236).

The report was based on a survey of more than 20,000
manufacturing firms across the country in 2001.

"We distributed questionnaires to all manufacturing firms. If
a firm did not return its questionnaire, we asked BPS personnel
to check whether the firm was still operating or not," Rifa said
by way of explanation.