More than 12,000 textile workers laid off, says API chairman

Adianto P. Simamora, The Jakarta Post, Jakarta

The Indonesian Textile Association (API) said on Monday that more than 12,000 textile workers had been laid off due to a drop in overseas demand triggered by the global economic slump.

API chairman Benny Soetrisno said that three textile companies operating in Semarang, Central Java, had recently laid off about 12,000 workers, while some 800 workers were laid off in Bandung, West Java.

"I've just received information this morning from Bandung that about 800 textile workers were laid off," Benny told a media briefing.

He said the three companies in Semarang had closed down their factories.

Benny said the current situation was very difficult for the textile industries to survive in, and added that if no immediate action was taken, there could be more workers losing their jobs. He did not elaborate further.

Textile products are one of the country's main non-oil and gas exports, and the sector absorbs a huge number of workers.

"Many textile companies have cut production to about 70 percent of their total production capacity compared to an average of 87 percent last year, due to sluggish (export) orders," he said.

"Sluggish demand from main textile buyers and the influx of new cheaper garment and textile products from China since August have forced local producers to lower production in order to survive during this difficult time," he said.

Indra Ibrahim, the API executive director, said earlier that the country's 2001 textile exports would decline by 25 percent from US$8.2 billion last year due to the economic slowdown in the main U.S. market.

Meanwhile, Madi Rukasah, processing manager of PT Wistex in Majalaya, West Java, said that textile and garment companies operating in the Bandung and Majalaya areas had cut back on their employees' working hours over the past two weeks to save costs amid declining export demand.

"Many companies have cut workdays to five days a week from six and shifts to one shift from two and even three shifts a day," said Madi.

The U.S., Europe and Japan account for about 45 percent of Indonesia's textile exports, while the so-called "non-quota countries" such as the Middle East, Latin American and African countries, take the remaining 55 percent.