More companies prefer to produce foreign brands to boost exports

Debbie A. Lubis, Contributor, Jakarta

For many Indonesians, browsing branded apparel at shopping arcades or designer outlets is something they really look forward to, especially when they have a chance to visit foreign countries like the United States, Europe, Japan or Hong Kong.

Such foreign brand lovers might feel embarrassed if they knew that some of the clothes they had purchased were made in Indonesia, perhaps in factories near their homes.

Indonesia is one of the major producers of foreign branded clothes and footwear. Many Indonesian garment factories have for years manufactured famous international brands for women, men and children that include polo shirts, T-shirts, sports wear, casual attire, jeans, underwear and designer labels.

These days, more local companies prefer to manufacture foreign brands to win an edge on the world market.

Secretary General of the Indonesian Textile Association (API) Indra Ibrahim said that most of such branded products were exported to Japan, the U.S. and European countries.

Currently, about 90 percent of API's 2,000 members export their products, some of which are manufactured under licenses from major apparel producers in the world.

"Most of the buyers prefer to buy products manufactured under the license of international brands because of their recognized quality," he said.

One of the holders of a branded-garment license is publicly listed company PT Great River International, which currently holds exclusive licenses to manufacture and distribute over 30 high-quality and well-known international brands.

The company has formed strategic alliances with world-class textile and apparel manufacturers such as van Laack GmbH of Germany and Japan's Tomen, Gunze and Toyobo.

The products produced by Great River carry recognized brands such as Triumph, Arrow, van Laack, Choya, Kenzo, Homme, Nino Cerruti, Austin Reed, Savile Row, Hom, Balenciaga, Pierre Balmain, Oscar de la Renta, Jockey, Lee, Elle Paris, McGregor, Haggar, Mickey&Co, Lady Bird, Sesame Street, Garfield, Elle Poupon, Elle Petite, Lee Youth and Jockey Kid.

Over 70 percent of the company's products are exported, while the remainder is sold on the domestic market.

Continuous technical assistance from its more technologically advanced partners has helped raise Great River to become an important garment supplier in the global market. The company has established export networks with over 20 countries, including the U.S., Japan, Australia, European countries and Southeast Asian countries. The company has sales representative offices in Singapore and Malaysia.

Meanwhile, to keep up with the global market and technology advancement, Great River is developing an e-commerce platform to support its marketing plan.

Great River owns three production facilities located in Cibinong, Cikarang and Purwakarta. Split into two working shifts, these three production facilities are equipped with automated, state-of-the-art technology, and are able to produce a total of 44 million pieces of clothing annually.

Another local major garment manufacturer is PT Texmaco Garments Indonesia. Besides producing international brands, the company has also designed and developed its own brand name.

Its manufacturing facilities, located in Karawang, near Jakarta, is designed to produce a wide range of specialized apparel, such as sportswear, active wear, skiwear and winter wear.

The company produces world-class garments for leading brands including Nike, Polo Ralph Lauren, Tommy Hilfiger, M & S, Van Heussen and Sarah Lee.

Texmaco Garments has established offices in Malaysia, Singapore, Middle Eastern countries, Japan, Australia and the U.K., and operates through locally based company Texfi in the U.S. The company's customers include M&S, Guess, Haward of Japan, Padini of Malaysia, and Musto of the U.K.

With such a broad client base, the company's exports reached about US$100 million in 2002.

Meanwhile, PT Tuntex Garment Indonesia manufactures sportswear, jackets, T-shirts, trousers and shorts under the Adidas and Nike brands. Tuntex owns four factories in the areas of Tanjung Priok and Cakung in Jakarta, and in Mauk and Cikupa of Tangerang. With an annual production capacity of about 10 million units, the company exports its products to France, Germany and the U.S.

To maintain the high quality of its products, the company conducts color tests in Singapore, while Adidas and Nike send their own professional staff to Indonesia to monitor quality control.

For PT Mayer Textile Industry Indonesia, Europe, Japan, and the U.S. are the best markets for the men's and ladies' wear it manufactures under the brand names Mayer, Promote, and Dunlop.

Separately, Metro Corp Indonesia has its own specialty lines, preferring to manufacture branded blouses, children's wear, ladies' wear, and men's wear under licenses from The Limited, Marks and Spencer, Burberry's, Gymboree, Hush Puppies, Kahala, Disney, Express, NY&Co, Macy's, Cotton Fields, and Tom Taylor.

The company uses its Metro gateway office in Jakarta and Hong Kong to monitor its international merchandising, manufacturing, sourcing, distributing and retailing activities.

Columbia Indonesia garment company, on the other hand, specializes in a single brand. It has two production facilities in Tanjung Priok, Jakarta, and Cikampek, West Java, that manufacture sportswear, jackets, vests and pants under international brand name of Columbia. The products are exported to the U.S. and Germany through its marketing office in South Korea.

Although demands from the world market continue to show an increasing trend, Indonesian garment producers have difficulties in meeting growing demands due to high production costs in addition to import quota imposed by some countries on Indonesian textile products.

Nur Eviyanti, quality control manager at Columbia Indonesia garment company, said the export quota restriction and the decline in foreign buyers' confidence in Indonesian products due to security issues, had caused a 20 percent drop in the company's exports.

"Demand from international buyers will recover in line with improvement in the social and political conditions of Indonesia," Evi said.