Textile makers to face tough challenges: Forum

Sari P. Setiogi, The Jakarta Post, Jakarta

The Indonesian textile and apparel industry may further lose its export market share once the quota system in its main U.S. and European markets is scrapped by 2005, an industry leader said.

Indonesian Textile Association chairman Benny Soetrisno said on Wednesday local textile manufacturers would be squeezed out by more efficient producers from countries like China, Vietnam, India and Bangladesh.

"Lack of trained labor as well as lack of efficiency and lack of funds to upgrade machinery will weaken the national textile industry," he said in a speech at the opening of an industry forum here.

According to the World Trade Organization ruling, the current export quota system set by the U.S. and Europe must be eliminated starting on Jan. 1, 2005.

The quota system allows for non-efficient producers to obtain export markets for their products.

About half of the country's textile production goes into the world market.

According to data from the Ministry of Trade and Industry, by last year there were 2,654 textile companies across the country -- with 80 percent of the big companies located in Jakarta and West Java -- employing more than 1.18 million people.

The president of apparel maker PT Great River International, Sunjoto Tanudjaja, predicted China's share of the textile export market could jump to 45 percent in the next five years from its present 17 percent.

Indonesia currently holds a 2 percent market share.

"In the next five years, global textile trade value is expected to reach US$500 billion per annum," he said.

USAID official William James said although Indonesian textile markers would face tougher competition from neighboring countries, there would be opportunities in high-end products such as women's undergarments, infant-wear and designer fashion.

Ministry of Trade and Industry representative for textiles Luky Hartini agreed. Indonesia already had a leading edge in such products, she said.

In the past two years, for example, Indonesian exports of quality swimwear had increased significantly, she said.

eyebox

Export value of RI textiles and textile products, 2001-2003 in billions of rupiah

-------------------------------------------------------- No. Kind of Industry 2001 2002 2003 -------------------------------------------------------- 1. Fiber 122,25 181,96 136,32 2. Yarn 1,243,84 1,229,48 1,208,65 3. Fabric 1,661,01 1,404,35 1,523,39 4. Garments 4,344,55 3,805,46 3,926,80 5. Other textile 276,67 267,30 233,13

products --------------------------------------------------------

TOTAL 7,648,32 6,888,56 7,028,28 -------------------------------------------------------- source: The Central Statistic Agency (BPS)