Hundreds of textile firms have money woes
Hundreds of textile firms have money woes
JAKARTA (JP): Hundreds of small and middle-scale textile and
textile-related companies are reportedly confronting serious
financial problems due to higher operation costs from the sharp
depreciation of the rupiah.
Indonesian Textile Association (API) secretary-general, Benny
Soetrisno, said yesterday the currency crisis had caused the
increase in prices of raw materials from between 12 percent to 25
percent.
"Textile companies, as a result, are unable to fully use their
production capacities due to the higher production costs," he
told Antara news agency during a textile seminar in Yogyakarta.
Most of API's 5,000 members are small and medium-scale
companies.
Benny said the association had recommended that its members
reduce production by at least 20 percent to enable them to
survive.
"API also suggests that the ailing companies should cooperate
with more healthy companies," he said.
Ministry of Industry and Trade Tunky Ariwibowo said last week
that more than 200 local companies had registered for dollar
loans to boost their working capital.
Provision of loans to local export-oriented firms is one of
the government's efforts to boost the country's non-oil exports,
he said.
Most of the companies which have applied for the loans are
textile and textile related, he added.
"Most are from the textile industry because the industry is
the most active exporter, and most of them are exporters with
special status," he said.
Benny noted that the sharp drop in the value of the rupiah
against the U.S. dollar, which has struck Indonesia since early
July, made local products cheaper in overseas markets.
"Exporters are trying to sell as many of their products as
possible to grab more dollars," he said, adding that national
textile exports reached around 15 percent of total exports.
The export value of textile and textile-related product was
targeted to reach around US$7.5 billion this year, up from last
year's figure of $6.42 billion, he said.
Indonesia exports most of its textile and textile-related
products to the U.S., Japan, the United Kingdom and Germany.(08)