Govt blamed for uncertainty in textile industry
Govt blamed for uncertainty in textile industry
JAKARTA (JP): The Indonesian Federation of Batik Cooperatives
says the current uncertainty in the textile industry is partly a
result of a lack of support for the industry from the
government.
The federation's chairman, Noorbasha Djunaidi, said on
Saturday that the government had never had a firm policy with
which to guide the country's textile industry.
On the other hand, textile producers had also failed in
coordinating the marketing of their products, he said.
"Indonesia has never been able to properly organize the
marketing of its textile products," he told the Antara news
agency in an interview.
The government and associations of textile-related producers
had also failed to establish a strong platform to better
facilitate sales of textile products both at home and overseas,
he said.
"Many textile producers have never, for example, used
important marketing indicators such as projections on demand
growth in selling their products," he said.
In addition to a shortage of raw materials, the poor marketing
strategy had also played a role, he said, in the reported
collapses of many small textile companies.
A majority of small textile companies in the important textile
producing province of Central Java are reported to have collapsed
as a result of a shortage of raw materials.
Independence
Observers have claimed that the acute shortage of raw
materials, which has also hit small-scale producers in other
provinces, has taken place because of the limited number of
"independent" producers of raw materials.
Most of the upstream activities of the country's textile
manufacturing industry are controlled by large investors, who
mostly use the upstream products for their own downstream
operations.
Noorbasha, the former caretaker of the heavily indebted
Kanindotex group of textile firms, said that the acute shortage
of textile raw materials occurred only after the government
abolished its protection on small-scale firms in the mid-1970s.
Before then, the Investment Coordinating Board did not allow
big companies to operate in downstream activities if there were
already small companies producing the same products.
At that time, he said, small-scale companies had also received
support from PN Sandang, the state-owned textile producer, which
supplied them with raw materials at lower prices.
Noorbasha said another reason for the shortage of raw
materials was the imbalance between the number of companies
operating upstream as compared with those operating in finishing
and garment production.
Another factor in the current uncertainty in the textile
industry, he said, was the inability of banks to assess the
viability of textile companies.
He said many banks did not base their credit assessments on
the viability of the business of a company but rather on the
person behind the firm. The banks did so because of a lack of
knowledge about the textile industry, he said.
The result is that many textile companies use credit obtained
for ulterior purposes, leaving their textile factories
unattended, he added. (hen)