PT Sandang to assist in textile industry crisis
PT Sandang to assist in textile industry crisis
JAKARTA (JP): Minister of Industry Tunky Ariwibowo says state-
owned PT sandang I and PT Sandang II will assist small and
medium-scale textile companies to cope with the shortages of
textile materials.
"The two companies will supply textile materials to small and
medium-scale companies under soft payment terms," Tunky told
journalists after a meeting with President Soeharto yesterday.
He said he would soon meet with Finance Minister Mar'ie
Muhammad to discuss soft loan financing for the small and medium-
sized firms.
Tunky met with the President to discuss the problems faced by
Indonesia's smaller textile companies, especially in relation to
the procurement of raw materials.
The meeting was prompted by recent complaints from small
textile firms in West and Central Java that their businesses were
threatened with bankruptcy as a result of sharp rises in the
prices of raw materials.
Tunky did not disclose the amount of money to be extended in
soft loans, saying only that he would discuss the issue with the
finance minister.
He added, however, that the planned assistance from the state-
owned companies would provide only a short term solution to the
difficulties faced by small and medium-scale textile companies.
The smaller firms would have to restructure their operations
if they were to survive in the medium to long term, he said.
Programs
Tunky said the government would study the technology used by
those companies and would then decide what kind of programs would
be needed in order to improve their efficiency and productivity.
He admitted that the problems currently encountered by small
and medium-scale firms were a result of the increases in the
prices of textile materials such as cotton fiber, rayon and
polyester.
The President, according to Tunky, suggested that Indonesia
secure textile materials by increasing rayon production or by
developing cotton estates in such cotton producing countries as
Kazakhstan and Uzbekistan in joint ventures with local
companies.
Indonesia currently depends on imports for almost 95 percent
of its cotton fiber needs.
The President also suggested that businessmen develop timber
estates to produce dissolving pulp, the main material used in the
production of rayon fiber.
Indonesia has three rayon fiber producers, about 10 rayon yarn
manufacturers and two purified terepthalic acid producers.
According to Tunky, Indonesia's textile exports reached US$1.3
billion in the first quarter.(04)