RI textile exports set to increase

RI textile exports set to increase

The Jakarta Post, Jakarta

The Indonesian Textile Association (API) said on Wednesday
that export revenue from textiles this year would increase to
US$8 billion from $7.6 billion last year.

Meanwhile, the Indonesian Footwear Association (Aprisindo)
said the country's shoe exports would drop slightly by 6.25
percent to $1.5 billion this year, as some overseas buyers had
begun turning their orders to other countries such as China and
Vietnam, which offer lower prices.

API executive director Indra Ibrahim attributed the projected
rise in textile exports to "aggressive marketing efforts" from
producers, better government policy and the recovery of the U.S
economy in the second half of this year. He did not elaborate.

U.S. is Indonesia's largest export destination.

"With all these conditions, I'm quite optimistic the country's
textile exports will recover this year," he was quoted by Antara
as saying.

API said that the domestic textile industry had been hit by
various uncertainties last year, including the world economic
slowdown.

The association said riots and labor strikes at home had
triggered foreign buyers to delay their orders, while several
buyers shifted their orders to other countries.

Government policies had also been seen as discouraging,
particularly on the government decision to raise fuel prices,
electricity rates and the minimum wage.

API said that many textile companies had also not been able to
renew their old machinery due the lack of working capital.

At the same time, demand from buyers has been sluggish
following the U.S. economic slowdown, which was worsened by the
Sept. 11 terrorist attacks on the U.S.

The $7.6 billion textile exports in 2001 was a drop from $8.2
billion in 2000.

Separately, Aprisindo chairman Harijanto said overseas shoe
buyers, particularly from the U.S., had begun shifting their
orders to China and Vietnam due to the non-conducive business
situation at home.

He added the entry of China to the World Trade Organization
(WTO) had boosted China's competitiveness, but caused Indonesian
products to become less competitive.

"Our products are now 12 percent more expensive than those
from China and 20 percent higher in price than those from
Vietnam," he said at a hearing session with the House of
Representatives Commission V on industry and trade affairs.

Hariyanto said that the shoe industry had also been badly
affected by the increase in fuel prices, electricity rates and
minimum wage.

"If the government doesn't issue favorable polices for the
sector, I'm certain that exports will decline and many companies
will have to shut their factories down in the next three to four
years."

He feared that many foreign investors in the sector would soon
relocate their factories to China and Vietnam.

He also said that the government should accelerate the
restructuring of debts owed by shoe companies to allow them to
seek bank loans for working capital.

The country's shoe exports reached $1.6 billion last year and
$2 billion in 2000.