The first part of following post was originally posted on March 12, 2007, at The Stitcher’s Guild discussion of “Fabric (& other goods) Sourced in China”
This article from The Jakarta Post indicates that the Indonesian textile groups are facing illegally imported cottons and garments from China and Viet Nam. The article list many problems for the Indonesian textile manufacturers including the high cost of export interest (18% as opposed to
7 percent in Vietnam, 8 percent in Mexico, 10.5 percent in India, 11 percent in Pakistan and Bangladesh’s 12 percent.
The aging textile machines in the country need replacement and loans from the country’s banks, and a revival of the export credit. Since the export credit has been removed
At present, most local textile companies focus their export production on getting higher prices. Many of them have also chosen to market their products overseas because their products are no longer able to compete in the domestic market with cheap and illegally imported products from countries such as China and Vietnam.
The API says that of the 1.01 million tons of textile products sold in the domestic market in 2006, about 50 percent was illegally imported. Only five percent was imported legally.
Textile manufacturing takes a lot of electricity and Indonesia’s electricity tariff average kilowatt per hour (8%) is higher than Bangladesh’s (3%), Viet Nan (7%), and China (7.6%)
Then they blame the productivity of the workers, ranked 59% in the world, (China is ranked 36%) and mention that the workers are paid $.76 per hour as opposed to China’s $.55 per hour.
Rough reality!!!! if we are to believe all the facts in the report.
Today the Jakarta Post reports that “the Finance Ministry has promised to soon start operating a scheme worth Rp 255 billion (about US$27.8 million) for subsidizing the interest on loans taken out by textile and garment industry firms for reequipping purposes.” The money has been allocated in the 2007 budget but the disbursement scheme has not been solidified.
Through this subsidy of loan interest payments the government hopes to increase textile employment and exports in the next three years.
Perhaps we will see some beautiful Indonesian fabrics available to the sewing public soon! Be still my heart (smile!)