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Indonesian textile body for streamlining stimulus packageTuesday, February 23, 2016 > 09:44:25
(Fibre 2 Fashion)
Indonesia's textile industry has called for effective implementation of the government's economic stimulus packages to improve competitiveness as the country moves toward free trade agreements with several countries.
Indonesian Textile Association (API) chairman Ade Sudrajat said while the Association welcomed the 10 stimulus packages announced by the government, the packages need to be implemented in an effective manner.
“The stimulus packages are a response to our concerns and they have provided certainty for business. However, the implementation can still be improved,” Sudrajat said at a press conference in Jakarta.
The government's third stimulus package stipulates that industrial activities get electricity price cuts from 11 p.m. to 8 a.m. But the textile industry and the state electricity company PLN, which supplies the power, interpret the stipulation differently.
According to the PLN, the price cut will only be given to companies consuming more than they usually do every day. But the textile industry says the price cut should be given to industrial activities during the specified timeframe regardless of the quantity of their power consumption.
“We're asking for a further discussion with PLN, the Finance Ministry and the Office of the Economic Coordinating Minister on the matter,” Sudrajat said.
He also said his association also requested lower gas prices for the textile industry.
In the government's seventh stimulus package, the government reduced gas prices for the textile industry from $12 per million British thermal unit (mbbtu) to $9 per mbbtu, while in fact oil exported to Singapore is priced at $3.70 per mbbtu, he said.
Benny Soetrisno, Chairman of the API's board of advisors, welcomed the economic packages as they provide more business certainty. But he pointed out that a relatively high production cost because of electricity and gas prices has made local products less competitive.
Benny also said Indonesia's trade deal with the European Union under the Indonesia-EU Comprehensive Economic Partnership Agreement (CEPA) and a possible participation in the US-led Trans-Pacific Partnership (TPP) would help boost exports of its textiles and textile products.