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Indonesian textile industry to grow sluggishly in 2012
06
Dec '11
The growth of the Indonesian textile industry is likely to remain sluggish during 2012, as the sector would be hit by global recession and a hike in the cost of production due to rise in electricity tariffs.

As stated by Indonesian Textile Producers Association (API) Chairman Ade Sudrajat, the industry is predicted to achieve only a two percent growth during 2012, which is considerably lower than around 20 percent growth that the industry is achieving over the past few years.

Mr. Sudrajat said he foresees the international textile industry to witness a negative growth in 2012, but when talking about Indonesia and the Asean region, it can still post a slight positive growth.

The US-Eurozone debt crisis coupled with downturn of the Chinese economy was the main reason that spurs the decline in the global textile industry, the API Chief said.

The EU, US debt crisis may lead to a fall in demand for textiles, however, the production is likely to register a slight increase, he added.

He further said that the production costs for Indonesian textile industry may rise in 2012 as the Government is likely to introduce new sweeping policies, including an increase in the basic electricity cost.

According to the API Chief, the proposed hike in basic electricity tariff would lead to over 10 percent rise in the domestic cost of production of textiles, next year.

Thus, it is sought from the Government that it focuses more on development of the textile industry by accelerating infrastructural growth, as any hindrance to infrastructural development would prove detrimental for industrial growth in general, he said.

Mr. Sudrajat stated that he has not come across any indications of global slump impacting the Indonesian economy so far, but he expects that the effects would become evident next year.

Fibre2fashion News Desk - India

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