Wed, 22 Jun 2011

TEMPO Interactive, Jakarta:At least 20 Japanese textile companies plan to open outlets and build textile factories in Indonesia. “From weaving machines to dipping machines, there are a range of different producers looking at the option,” said Indonesian Textile Association chairman, Ade Sudrajat, in Jakarta yesterday.

However, Japanese investors expect the government to provide incentives and repair infrastructure for the plans to go ahead. “They feel it is difficult to build the plant if the infrastructure is inadequate,” said Ade. During his visit to Japan last week Industry Minister M.S. Hidayat said that his office had discussed this with the Japanese textile machine producers association and asked them to invest in Indonesia.

Indonesia is currently restructuring its textile machine and footwear industry, so it will be beneficial for Japanese companies to build their factories in Indonesia. However, Japanese machines are more expensive than in other countries.

For example, Japanese machines are 40 percent more expensive than Chinese machines, but the quality is better. “I asked that the price of textile machines be reduced, otherwise Indonesia will use Chinese products,” Hidayat said.

Around 50 percent of the local textile industry is still using Japanese machines. But as they are expensive, Chinese machines are used instead. In return, Hidayat said, the government would offer incentives such as tax breaks and fiscal incentives.