Textile industry to be restructured

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)