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Help desk to save textile, shoe industries from layoffs
Jakarta Post - October 3, 2015
The Investment Coordinating Board (BKPM) and several ministries are preparing to launch the dedicated desk. BKPM head Franky Sibarani said on Friday the special desk would be located at the BKPM office and was set to launch on Oct. 9.
The desk will receive and identify problems experienced by companies in the industries and offer them specific and applicable solutions. "Currently, we are focusing on textile and shoe industries as they are prone to layoffs due to the sluggish economy," he said.
He added that many companies had complained about soaring prices of raw materials – which are mostly imported – as the rupiah nose-dived to more than 14,700, a level unseen since the 1998 financial crisis. They also complained about illegal textile and apparel imports.
According to a statement by the BKPM, the textile industry has laid off around 39,000 workers recently. However, the BKPM also booked a 58 percent increase in textile industry investment realization value during the first half of this year, to Rp 3.88 trillion (US$264,67 million).
The Indonesian Textile Association (API) even noted that the garment industry in Central Java suffered an 8,000-worker shortage.
Franky said such an "anomaly" encouraged the government to take immediate steps to save existing companies in the industries by establishing the help desk.
"There will be three parties hosting the desk, which are officials from the associations, the BKPM and related ministries," he said, adding that officials from the ministries in charge would be available on an on-call basis depending on the problems raised by companies.
The Trade Ministry, Industry Ministry, Manpower Ministry, Finance Ministry and Energy and Mineral Resources Ministry are ready to join forces with the BKPM to run the services.
Trade Minister Thomas Lembong told journalists at the same event that the textile and footwear industries were among the biggest in the country in terms of manpower absorption and foreign exchange earnings from exports (DHE).
According to the BKPM, investment realization value in the footwear industry was recorded at Rp 759 billion in this year's first half, or up 613 percent from the same period last year.
Meanwhile, export potential from these industries was considered adequate as the textiles and apparel industry currently takes only 1.85 percent of global market value, or US$700 billion. The footwear industry, meanwhile, has 4 percent of the market, or around $100 billion.
"We hear that investments amounting to $200 billion are ready to leave China due to its slowing economy and Indonesia is among their next destinations. We have to address the issue by taking all measures to support our industries," Thomas said.
Franky elaborated that services offered by the special desk would include, among other things, loan and tax payment restructuring. "For example, a company can pay its taxes at a later time after it proposes to the desk to get an approval after going through an audit by the team," he said.
Separately, API chairman Ade Sudrajat told The Jakarta Post on Friday that around 50 textile companies had laid off employees. "We hope that the industries can benefit from the desk," he said. (prm)
Source: http://www.thejakartapost.com/news/2015/10/03/help-desk-save-textile-shoe-industries-layoffs.html.
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