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Illegal import hampers textile industry growth

Jun '07
Joko Santoso, head of Indonesian Textile Association in Central Java, while attending the International Garment and Textile Machinery and Accessories Exhibition (SEMATEX), said that illegal imports of garments is hampering textile industry growth.

Around 55 percent of garments are imported illegally to meet national demand and only five percent of textile products enter the country lawfully, while the association's members supply remaining 40 percent.

These illegal, cheaper garments are giving a hard time to the genuine side of the industry and are one of the reasons for its struggle to compete in the international market.

Another cause for being under pressure is that 70 percent of the businesses still use decrepit equipments which are 15 to 25 years old.

Santoso said that the House of Representatives has approved a new Trade and Industry policy that would provide assistance to the textile industry and allow them to purchase new machineries. Government has allocated Rp255 billion (US $28.3 million) from 2007 budget.

Central Java's textile industry has an annual production value of around Rp510 billion with total investments of Rp160 billion.

The export value of textile industry has also shown a steady growth. In 2003 it stood at $409.8 million and $567.5 million in 2005.

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