Indonesia's textile exports recover from setbacks

JAKARTA (JP): Indonesia's exports of textiles and textile products are recovering, after decreasing in the first half of the year, an executive of the Indonesian Textile Association said yesterday.

"The recovery trend seems to be continuing because our records indicate textile exports are increasing in the last quarter of the year. And I'm sure that our exports are likely to exceed US$6 billion this year," the association's vice chairman, Chamroel Djafri, told journalists.

During the first quarter of this year textile exports dropped by 26 percent to $1.6 billion.

The rate of the export declines slowed down to only nine percent to $3.26 billion during the first seven months of the year, Djafri said.

He added that this year's exports might slightly exceed last year's figure of $6.06 billion but far below a target of $7 billion.

The chairman of the Textile Association's Jakarta chapter Hariyadi B. Sukamdani said the shabby performance of Indonesia's textile exports resulted from many impediments, including the quota systems introduced by major importing countries, emergence of new textile exporting countries and increasing costs for local textile production.

"Because of our high production costs, we lose our competitive edge in the world market," Hariyadi said, adding that the most burdening costs lie in the high interest rate on debts for working capital.

Wages

Hariyadi noted that government-set regional minimum wage levels have also raised production costs. "Much more, the Ministry of Manpower will soon raise wage standards. I'm afraid there will be some textile factories going out of business," he said.

He acknowledged that the productivity of Indonesian laborers working in the textile industry is still below par. "We need to improve their productivity. And I will discuss this matter with the related ministries," he said.

Also, the promotion of Indonesian textile products abroad has not been accomplished professionally, Hariyadi said.

And so Indonesian textiles, whose quality is actually much better than those from other countries, are not well known abroad.

He said problems related to the textile industry will also be discussed at the coming, seventh, Indonesian Textile Association congress, to be conducted on Nov. 26 and 27.

Minister of Finance Mar'ie Muhammad and Coordinating Minister for Industry and Trade Hartarto are scheduled to address the congress, which will also elect the association's board of directors.

The future of the textile industries will be the key issue during the two-day meeting, as the theme of the congress is making textile and textile related products Indonesia's export pioneer for the new era of international trade competition.

Djafri predicted that textile products will remain the backbone of the country's non-oil exports next year, when the new General Agreement on Tariffs and Trade (GATT) comes into effect. (rid)