Manufacturing sector shows signs of recovery
Manufacturing sector shows signs of recovery
JAKARTA (JP): The country's manufacturing sector is showing
signs of recovery, with many companies beginning to intensify
production, Minister of Trade and Industry Rahardi Ramelan said
on Thursday.
He said production capacity utilization in the country's
manufacturing sectors reached 61 percent in the first quarter of
the year, up from 55 percent in the seven-month period of June-
December 1998.
"However, compared to the pre-crisis period, the productivity
level is still low," Rahardi said in a written speech at a
seminar on export opportunities read out by Director General of
Foreign Trade Djoko Mulyono.
The production capacity utilization level of the country's
manufacturing sector reached 69 percent in 1996, Rahardi said.
He said the production capacity utilization level of the
metal, machineries and electronics and several other industries
rose to 58 percent in the first quarter of the year, from 48
percent in the seven-month period from June to December last
year.
In 1996, the production capacity utilization level in metal,
machineries, electronics and various other industries reached 71
percent, he said.
He said production activities in the chemical, agronomy and
forest products industries also improved during the first quarter
of the year, with a production capacity utilization of 56
percent, up from an average utilization of 2.9 percent throughout
1998.
Rahardi said the intensification of productivity in the
country's industrial sector has paralleled the signs of recovery
in the country's economy this year.
Indications of the economic recovery include the decline of
inflation to around 3.08 percent in the January to May period and
the recent strengthening of the rupiah to around Rp 7,000 per
U.S. dollar, he said.
He said the increasing productivity of the industrial sectors,
however, would not necessarily affect the country's exports.
Rahardi said export value have decreased by 8.6 percent to
reach $48.85 billion in 1998 from $53.44 billion in 1997.
"The value further dropped by 11.81 percent for the period of
January to June this year," he said.
Djoko said the drop was due to, among other things, tighter
competition with other exporting countries that produce similar
products, the low quality of many Indonesian products and the
weakening demand in some markets.
He said Indonesian exporters should improve the quality and
competitiveness of their products in order to beat other products
offered by other countries.
"Our products are very easy to be imitated or reproduced by
other countries because they are so lacking in technology," he
said.
He said some 399 shipments of Indonesian products were denied
entry into the United States from January to May this year
because they had failed to meet international quality standards.
Djoko said that to boost exports, the government would
continue to simplify export procedures, provide incentives for
exporters and promote Indonesian products to overseas markets.
He added that exporters were encouraged to find new markets
other than the current 24 countries that buy Indonesian goods.
(cst)