President urges people to buy more local goods

JAKARTA (JP): President Soeharto called on people again yesterday to buy local products, saying there was no reason to prefer foreign products because local ones were just as good and cheaper.

"The use of local goods should be made a national drive. Love for our own products is part of nationalism," Soeharto said when opening PT Polysindo Eka Perkasa's purified terephthalic acid (PTA) plant in Karawang, West Java.

He said increased use of domestic products would enable local industries to grow and strengthen Indonesia's economic foundation.

Soeharto said that at a recent cabinet meeting he told the government to give top priority to buying and using local products.

"Our local products are as good and are not more expensive than foreign ones. There is no reason for us to prefer imported goods," he said.

He said Indonesian industries were getting better.

"Now we are able to make machines, including textile machines," he said.

Indonesia would continue to pursue industrialization by improving human resource quality, optimizing the use of natural resources and raising technological capabilities, he said.

"We hope that in 20 years our industry will be strong and well developed enough to enable us to compete in both domestic and foreign markets," he said.

He warned that Indonesia would just be a market for foreign goods if it failed to strengthen its economy.

Indonesia is committed to free market under the ASEAN Free Trade Area in 2003 and under the Asia Pacific Economic Cooperation in 2020.

PTA plant

The facilities that were opened yesterday also included Polysindo's polymer facilities and its Citarum industrial estate. Polysindo is Texmaco Group's flagship company. Texmaco is Indonesia's biggest polyester maker.

Texmaco's president, Marimutu Sinivasan, said the PTA plant would make 360,000 tons of PTA a year -- a third of Indonesia's polyester output.

He said the PTA output would feed the company's polymer plant, which had been operational since last September with a capacity of 330,400 tons a year.

The polymer plant in turn feeds the company's polyester staple fiber factory, which was expanded last September to an annual capacity of 180,000 tons.

Texmaco Jaya, another publicly-listed Texmaco unit, makes fashion fabric and garments.

Sinivasan said his company used to buy PTA from Bakrie's plant, which made about 500,000 tons a year.

The PTA and polymer facilities are the centerpiece of a US$645-million expansion program.

The equipment and machinery for the plants were fabricated by Texmaco Perkasa engineering.

"Indonesia imports roughly $12 billion in capital goods and $12 billion in raw materials a year. Even as the country is trying to establish an industrial infrastructure and build up export industries like textiles and pulp, we're spending foreign exchange to import costly capital goods and equipment needed to build up these industries," he said.

He said one goal in vertically integrating the polyester business and building an engineering company in Indonesia was to break that cycle and give the country the building blocks of industry.

Sinivasan said a sharp rise in international cotton prices had prompted local textile makers to substitute polyester staple fibers for cotton.

Indonesia's makes more than a million tons of PTA a year but this meets only 56 percent of domestic demand. The shortfall is imported.

Sinivasan said his company built the Citarum industrial estate to enhance business partnerships between small and big businesses. (bnt)