Textile up-gradation helps increase employment – Textile Director

August 29, 2009 - Indonesia

The Indonesian Government had recently announced a technology up-gradation package amounting to Rp 240 billion in the current budget. As many as 190 textile companies have registered themselves to avail benefits of the package.

The government will provide a subsidy benefit of 10 percent, for those who desire to upgrade their machinery. This scheme has been announced to help increase productivity, efficiency and quality of the textile sector.

The Director of the Department of Textiles, Mr Arryanto Sagala announced that the subsidy amount has been disbursed to 16 small and medium size textile units till date amounting to Rp 19.35 billion.

Most of the machinery in the industry is out of date, and at least 20 years old, including 64.4 percent of 7.8 million spinning machines, 82.1 percent of 248,957 weaving machines and 84.1 percent of 41,312 knitting machines.

In 2007, the government had allocated Rp 255 billion for the program, but only 60.1 percent of that amount was disbursed. In 2008, it increased the subsidy to Rp 330 billion, but the disbursal figure fell to just 55.06 percent of that figure.

The government has reduced the subsidy to Rp 240 billion in the 2009 budget and hopes to disburse no less than Rp 200 billion to 173 textile companies, the same number, which had applied for the fund in 2008.

Mr Sagala feels that the machinery revitalization programme would have helped in increasing the production by 17 percent and employment by 25 and in the process pushing down inefficiency to between 6 and 18 percent.