RI textile exports seen to drop 10 percent

Adianto P. Simamora, The Jakarta Post, Jakarta

The country's export revenue from textile and textile products is expected to decrease by 10 percent this year from US$7.6 billion last year because local products cannot compete in export markets, according to the Indonesian Textile Association (API).

Associate chairman Benny Soetrisno said that many buyers in the world's largest textile markets -- the United States and Europe -- had switched to products made in other countries because the prices of Indonesian textiles had become less competitive.

"We can't compete in those markets anymore, our products are now more expensive than in other countries," Benny told The Jakarta Post over the weakened.

Indonesian textiles and textile products have become more expensive because the industry mostly uses antiquated production equipment.

Indonesia booked a record Rp 8.2 billion in the exportation of textiles and textile products in 2000, but exports slipped to $7.6 billion the following year.

API earlier predicted this year's textiles exports would reach $8 billion after Minister of Industry and Trade Rini Soewandi announced that the industry would be included in the government's revitalization program announced last February.

Under the planned program, the government was to help secure funds to the ailing textile industry to upgrade dated machinery so that manufacturers could boost production and improve efficiency.

However, the program has not run as expected because the government has failed to seek new investors to fund the program.

Domestic banks, meanwhile, are reluctant to provide capital, worrying that manufacturers will not be able to repay their debts.

API said that about 60 percent of the existing textile machinery was more than 15 years old, which increased production costs.

"With such facilities, it will be difficult for Indonesia to compete with other countries, such as China, Thailand and other ASEAN countries," he said.

Benny also said the recent increase in fuel prices, electricity rates and the minimum monthly wage had further undermined Indonesia's textile export performance, as they increased the financial burdens of many companies and pushed up the prices of their products.