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Indonesia trims budget for textile machinery upgrade

12
Jun '12

Indonesian Ministry of Industry has announced a reduction in the budget allocated for machine upgradation programme, which ams at enhancing the competitiveness of textile, leather and footwear industries.

Industry Ministry’s Textiles and Miscellaneous Industries Chief, Ramon Bangun, said the Ministry would cut the budget allocation for the programme by 4.6 percent from last year’s Rp 152.5 billion to Rp 145.5 billion this year.

The reduction in budget allocation followed a need for budget efficiency required to balance the delay in fuel price rise.

Mr. Ramon informed that a sum of Rp 34 billion, which is equal to 23.37 percent of the Ministry’s total budget allocation for restoration of aging industrial machinery, has been released to 32 companies by May 2012.

The Ministry originally sanctioned the aid for 100 firms, but so far it has disbursed the amount only to 32 firms, he added.

Mr. Ramon said the Ministry was also assessing another 18 firms for the programme, and added that more than 173 firms were asked to benefit from the programme this year.

With an aim to rejuvenate the industries and to draw private investment, the machine upgradation programme was launched for the textile industry in 2007 and for the leather and footwear industries in 2009.

According to the Ministry’s 2011 data, thousands of textile industries across Indonesia use about four million spinning spindles, 34,000 knitting machines and 200,000 weaving machines that are over 20 years old.

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