Textile companies face yarn shortage

JAKARTA (JP): Textile manufacturers on the north coast of Central Java have been suffering from an undersupply of yarn due to the economic turmoil, companies in the area have said.

The chairman of the Association of Textile Companies in Pekalongan regency, Malul Akbar, said Saturday the crisis, which has slashed the rupiah's value against the dollar by over 80 percent since July, had caused the price of yarn to skyrocket.

"The price of yarn surged by over 200 percent when the dollar reached the Rp 5,000 level, causing the textile industry in Pekalongan to sweat," Malul was quoted by Antara as saying.

The rupiah has been fluctuating against the dollar wildly, even hitting a low of 15,000 from 2,450 last June. On Friday, it strengthened to 9,850.

Malul said the price of yarn had risen to Rp 13,000 a yard from about Rp 4,150 before the crisis began last year.

He said the price would continue to increase as long as the dollar continued to appreciate against the rupiah because yarn was bought in dollars.

Most textile companies in Pekalongan and Batang, also a regency in Central Java, imported cotton from China, Australia and the United States, he said.

The companies also imported rayon and polyester, he said.

"Even locally made yarn for these materials have about 70 percent of their contents imported, such as the caustic soda and pulp," he said.

But the companies could not raise the price of their products because the crisis had lowered people's purchasing power, he said.

The situation would threaten the companies if it was not solved soon, he said.

Malul said some companies had stopped producing or had reduced their production as a result of the crisis. Many had cut their workers' shifts to avoid mass layoffs, he said. (das)