Textile companies cut output as orders slump

Textile companies cut output as orders slump

SEMARANG (JP): Many textile companies have reduced production
due to a reduction in orders from their main foreign buyers, the
Indonesian Textile Association has said.

The association's senior executive, Benny Soetrisno, said on
Saturday that the textile industry had no choice but to cut
production in the wake of declining orders from the United
States, Japan and European countries.

"Sluggish demand from main textile buyers leaves us no
alternative but to lower production in order to survive the
difficult time," Benny said at a seminar on investment prospects
in Indonesia.

Benny said the country's textile industry was very sensitive
to the impact of the global economy slowdown as most of the
country's textile products were for export.

Association chairman Lili Asdjudiredja warned earlier that the
textile industry might not be able to meet its export target of
$7.8 billion this year.

"We estimate exports this year will be between 20 percent and
30 percent below our target," Lili said.

Benny said that aside from the global economic downturn,
growing political uncertainty had also caused uncertainty in the
textile industry.

He revealed that several medium-scale textile companies in
West Java had relocated their plants to other countries,
including Vietnam, in search of a relatively stable political
climate.

Textile producers have also complained about the country's
high cost of production. Not long after the government increased
power prices by 80 percent and basic wages last year, it raised
fuel prices for industry by 50 percent. It plans to also hike
fuel prices by 30 percent starting July 15. (har/03)