Fri, 19 Mar 1999

Small textile companies told to tie up with big producers

JAKARTA (JP): The government is encouraging small textile- related producers, including cooperatives, to work with major producers in fulfilling their export quotas.

Minister of Industry and Trade Rahardi Ramelan said on Wednesday the cooperation would allow small-scale companies and cooperatives to obtain assistance in the form of funding, raw materials or orders.

He said the big textile producers could in return use the export quotas allocated to their small business partners.

The government has provided about 6 percent of textile export quotas allocated by major trading partners, including the United States, the European Community and Canada, to small businesses and cooperatives. But due to the lack of working capital and limited production capacities, most small textile producers are unable to realize their export quotas.

He said as many as 733 companies applied for export quotas but four were disqualified. Qualified companies included 518 small firms and cooperatives.

The value of the country's export of textile and textile- related products has increased in the last five years. Rahardi said Indonesia booked US$7.8 billion in exports in 1998, an 8 percent increase from the previous year.

Of the amount, Rahardi said, only $3.6 billion was under government quota. The remaining is the trade by exporters without quotas to non-quota countries.

"So, it is not true that those companies which do not receive government export quotas will go bust," Rahardi said.

He also mentioned the establishment of the country's long- awaited export financing agency, which will soon be realized, most probably by a government regulation in lieu of law (PERPU).

"We are planning to submit our PERPU draft on the export financing agency by next week," Rahardi said.

Rahardi left Jakarta on Wednesday night on a 10-day trade and investment mission to the Netherlands and the United Kingdom. (02)