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Textiles to Feel Bite of High Energy Costs
Antara | December 04, 2011

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Indonesia’s textile industry is predicted to experience slower sales growth in 2012 due to the impact of global economic woes and a rise in production costs due to electricity price increases, an industry figure says.

Ade Sudrajat, chairman of the Indonesian Textile Producers Association (API) said textile sales are expected to grow by only 2 percent in 2012 compared to about 20 percent in the past few years.

“We have predicted that world textile industry growth in general will go down next year but in Indonesia and the Asean region it can still grow slightly,” Ade said last week.

He said the decrease in world textile industry growth was due to the United States and European debt crisis as well as a slowdown in China’s economy.

The crisis in the US and Europe may cause demand for textiles to decrease, but production will grow slightly, he said.

Ade added that the textile industry’s production costs in 2012 could go up as the government was expected to implement new sweeping policies affecting the economy next year.

Among the new policies the government was expected to adopt next year, Ade said, was raising the basic electricity rate, increasing production costs.

Ade estimated that the electricity rate rise would cause the national textile industry’s production costs to rise by more than 10 percent in 2012.

“Therefore the government should pay more attention to the textile industry by accelerating infrastructure development,” Ade said, adding that the infrastructure development slowdown would affect industrial growth in general.

Ade said that so far he had not seen any sign the global crisis was impacting the national economy but he acknowledged predictions it would be felt next year.