New spinning mill built in C. Java

JAKARTA (JP): PT Adikencana Mahkotabuana has started constructing a Rp 30 billion (US$13.4 million) spinning mill in Weru village, Central Java.

The company's president commissioner, Muhammad Lukminto, was quoted by Antara as saying that the new mill will have a production capacity of 3,000 bales of yarn a month and will employ 1,000 workers.

The mill, he said, is scheduled to be completed in eight months and will use spindles from China and the United States.

Lukminto said that the mill would face no problem in obtaining cotton fiber for its raw material supply because, unlike the domestic rayon fiber market, the cotton trade is free from monopolistic practices.

Currently the rayon fiber market is dominated by PT Inti Indorayon, PT Indo Barat and PT South Pacific. The oligopoly was recently blamed for the sharp increase in the price of rayon fiber which caused a number of textile industries to close down.

Lukminto pointed out that the high price of rayon fiber was not caused by the shortage of the material but by the oligopoly.

Rayon fiber is currently priced at Rp 5,100 (US$2.3) per kilogram.

Lukminto said that the Association of Textile Producers would ask the government to remove tariffs on raw materials for textiles. The government currently imposes import tariffs of between 5 to 10 percent on polyester and rayon fiber. (pwn)