Wigmakers brush away the crisis blues

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."