Wed, 24 Mar 2010

Jakarta (ANTARA News) - Indonesia expects its textile and textile product exports to rise by 12 percent to between US$10.5 billion and US$10.6 billion this year after dropping by eight percent last year.

Due to the global crisis in 2008 to 2009 the market of manufacturing products in the world has dropped including the textile and textile products that declined by 30 percent as demand was down, the chairman of the Indonesian Textiles Association (API), Ade Sudrajat, said here on Monday.

He said the national textile and textile product market was down by around eight percent. "This year we predict it will revive again to reach US$10.5 billion to US$10.6 billion rising by around 12 percent," he said.

In 2008 the country`s total textile and textile product exports reached around US$10.2 billion and dropped to US$9.8 billion in 2009.

He said the rise in the country`s exports this year followed improving economic conditions in the country`s main export destinations mainly the US, Japan and European countries.

In addition to that there are also several free trade agreements that would benefit Indonesia such as that with Japan and Australia.

"One of the factors that has helped save Indonesia`s textile and textile products in 2009 is a rise in exports to Japan by 18 percent in 2008," he said.

He admitted the rise in the country`s textile and textile product exports to Japan was not as high as that of Vietnam that reached more than 60 percent.

He said this happened because of a geographical factor namely Vietnam`s location which is closer to Japan than Indonesia`s.

Ade said he feared the rising trend of the world`s crude price and the government`s plan to increase basic power price would push production cost higher which will in turn reduce competitiveness.

"The impact of the crude price hike is felt by all industries in the world and the price will rise across the world including in China and India. But in terms of the domestic policy to increase the power price we have been offering options so that state power utility PLN would take a far-reaching view," he said.

Ade said so far the system of pricing set by PLN has been very discriminative and unsupportive to industrial growth. He said power prices for Indonesia especially Java-Bali should have been the same.

"What has happened so far is the price for my company is different from that of my neighbour. I myself still enjoy Rp490 per KWh but I will certainly get Rp1,350 if I increase the power. We must have a far reaching vision because energy is the backbone of industrialization," he said.

He said if electricity price and scarcity problems are not settled in 2010 and 2011 Indonesia will not be able to benefit maximally the momentum of the world`s economic recovery.