Wigmakers brush away the crisis blues

By Agus Maryono

PURBALINGGA, Central Java (JP): The current economic crisis has caused a number of companies to collapse under higher production costs, reduced sales and insufficient funds.

However, PT Indokores Sahabat, which processes hair clippings into wigs in Purbalingga, Central Java, has managed survived the crisis. The higher exchange rate of the U.S. dollar against the rupiah has increased the company's profits because most of its wigs are exported to the United States. The company employs 800 workers, 99 percent female, and has until today remained strong in the face of the economic crisis.

PT Indokores Sahabat commissioner Basuki told The Jakarta Post recently that during the past year the company's turnover has averaged Rp 250 million a month. After deducting the production costs of purchasing raw material, paying its employees and miscellaneous expenses, the company's net profit was Rp 54 million a month, he said. "Before the monetary crisis, our highest monthly profit was around Rp 30 million. That was in July 1997," Basuki said.

"Last month we produced 1,200 wigs," he said. One wig produced by Indokores is sold in the U.S. for $30. With an exchange rate of Rp 7,000 against the dollar, one wig has a value of Rp 210,000, while the raw material required for the production of each wig averages Rp 25,000.

Basuki said the company incurs about Rp 18 million in additional costs for things like transportation, fuel and equipment maintenance each month. Employee salaries vary between Rp 153,000 and Rp 550,000 a month -- with a total of Rp 150 million a month being paid out in salaries. Total production costs per month is Rp 198 million.

Basuki says that producing wigs is a time-consuming business. There are at least seven phases, starting with collecting the raw material in the form of natural hair clippings or synthetic hair, he said.

The process of production starts with washing the raw materials. The hair clippings are washed in boiling water in order to sterilize the hair and make it easier to handle. Then the hair is sorted according to its length. Next the hair is molded, followed by the process of attaching the hair to the wig with nylon yarn. The next step is to cut the hair according to the desired style, after which it is ready to be dyed. The company produces wigs in three colors: black, brown and red.

"The wigs are then ready for export. Almost 90 percent of our products are exported to the U.S.," Basuki said.

One wig requires an average of 0.5 to 1.5 kilograms of hair. Basuki said natural hair costs between Rp 50,000 and Rp 75,000 per kilogram, while synthetic hair runs between Rp 25,000 and Rp 50,000 per kilogram.

"During the economic crisis our turnover has increased. The business has been slightly effected by the higher exchange rate of the U.S. dollar, mainly in the increased price of raw materials. But the higher price of the raw materials can largely be offset by the increase in the price the final product fetches," Basuki said.

The price of raw materials has increased by less than 15 percent, while the price at which the wigs are sold has increased by 100 percent or more, thanks to the higher exchange rate of the dollar. "We have always sold our wigs for $30 each; from the time when the exchange rate was Rp 2,300 to the dollar to now when it is Rp 8,000," he said.

Behind the success of the company there is the plight of the workers, particularly those who have been in the business for more than five years. Most of these workers experience watery eyes and failing eyesight, unable to focus even on objects which are not far from them.

"I have to wear glasses because I cannot see very far," said Warsiti, not her real name, 26, a woman from Bojong who has been with the company for six years. "I cannot even read my own handwriting. I need glasses."

This is understandable because nearly all workers must sort hair at very close quarters, an average of 20 centimeters from their eyes.

Sumini, not her real name, 23, has worked at the company for three years and has the same complaints.

"In the beginning, I used to get watery eyes at the end of the day. Gradually I could not read the newspaper anymore. The optometrist prescribed glasses for me," she said. She added that she paid for medicine and the Rp-100,000 pair of glasses out of her own pocket.

Basuki admitted to hearing such complaints, but denied the large number of workers at the company who wore glasses was the result of the work they were engaged in.

"There are a few such cases, but many already wore glasses before they came to work here," said Basuki. "We are responsible. If their eyes are effected by their work we will help pay their medical bills."