Textile industry to be restructured

JAKARTA (JP): The country's textile industry will undergo a major restructuring in May in order to boost its exports and enable Indonesia to face new competitors on the world market, an executive says.

Secretary of the Indonesian Textile Association's Jakarta chapter, Lendo Novo, said yesterday that the restructuring is expected to increase the country's revenues from exports of textiles and textile products to US$20 billion by the end of the Sixth Five-Year Development Plan period in 1999.

According to the Central Bureau of Statistics, revenues from the exports of textiles and textile products increased by 6.9 percent to $6.2 billion last year from $5.79 billion in 1994.

In the last few years, Lendo said, between 20 and 40 textile and textile-product companies have canceled their memberships in the textile association.

He pointed out that Indonesia has the potential to become the biggest producer of textiles and textile products in the Asia- Pacific region but cannot in the current situation, which requires exports to travel through a third country.

To anticipate the rise of new competitors -- such as Myanmar, Vietnam and Cambodia, which are all capable of offering products at low prices -- Lendo was quoted by Antara as saying that Indonesia must at least be able to maintain its present customers.

Lendo said that the restructuring will mainly affect the spinning and weaving industries, while having a trickle-down effect on the sector's upstream and downstream industries.

Funding for the restructuring, he added, will be done through soft loans, the sources of which are currently being evaluated by the government. (pwn)