COMPETITIVENESS OF INDONESIA'S PRODUCTS TO WEAKEN IN WAKE OF POWER TARIFF HIKES

By Andi Abdussalam

Jakarta, April 28 (Antara) - The basic electricity tariff hike may increase production costs, particularly of domestic textile products by about 15 percent, thus weakening their competitiveness in the face of next year's ASEAN Economic Community (AEC).          "The production cost of both up and downstream textile products is expected to rise by 15 percent when the basic electricity tariffs increase in May," General Chairman of the Indonesian Textile Producers Association (API) Ade Sudradjat said.          Textile industries have predicted that the competitive edge of Indonesia's textile products will therefore be weakened in the face of the ASEAN Economic Community, which will begin next year.          "The increase in the basic power rate (TDL) beginning on May 1, 2014, will affect production costs. I am afraid it will disturb the performance of industries, particularly that of big industries, amid preparations to enter the AEC," Industry Minister MS Hidayat said on Monday.          Electricity tariffs for large-scale industries will increase in the range of 8.6-13.3 percent every two months as of May 1. The increase is based on the results of a discussion with the House of Representatives and the Energy and Mineral Resources Ministry.          The government will no longer subsidize the electricity tariffs for large-scale industries as of November 1.

RI MUST PREPARE TEXTILE INDUSTRY TO FACE FREE MARKET

By Andi Abdussalam

Jakarta, May 30 (Antara) - The Indonesian government must help textile and footwear industries prepare themselves so that their products will be able to compete in the global market and in the face of the ASEAN Economic Community (AEC) in 2015.         Indonesia's textile and textile product as well footwear industries still face challenges in the face of free trade in the global market, including a challenge to renovate their production tools. Most of their production tools are dominated by old machines of up to 20 years old.         Currently, a relatively high amount of machinery and components that are used to produce textiles in Indonesia are imported. The ministry of Industry stated that of the 2,900 textile companies that are active in Indonesia, more than 500 are dependent on foreign materials.         The ministry wants to tackle this issue as it hurts the industry's competitiveness. For that reason, the government has provided a tax holiday for investments in the country's textile producing machinery and equipment industry, according to the indonesia-investments.com online media last month.