The Jakarta Post: Bail Daily
by Rita A.Widiadana on 2012-07-02
We are now enjoying the holiday season and you may feel the need for a total fashion makeover to brighten your old wardrobe, replacing your clothes with fabulous, bright, flowing floral prints and summery dresses.
Welcome to lines of local fashion stores and “boutiques” scattered all over Denpasar’s major streets, offering copies of Donna Karan’s spring and summer collections, from cool and comfy skinny jeans to chic creamy and mint-green lace blouses. There are also Zara-like animal-print skirts and T-shirts on display.
All of the collections shown on the world’s runaways this summer season are now available in these local fashion outlets at affordable prices, usually less than Rp 200,000 (US$21.4) per piece. They are almost all “Made in China”.
A.A. N. Mahendra, chairman of the Bali chapter of the Indonesian Textile Association (API), expressed his concern over the flood of Chinese fashion products into the Balinese market.
“The island’s textile and garment industry is facing huge challenges, but we don’t have any weapons to plunge into this ‘trade war’. It is like a ‘Jack-and-the-Giant’ scenario,” Mahendra said to Bali Daily in his office recently.
Mahendra, who is also CEO of Khrisna Group, explained that the enforcement of the China-ASEAN Free Trade Agreement (CAFTA) in January 2010 hit the fiber, textile and garment producers hard in Bali and elsewhere in Indonesia.
API’s data revealed the domestic market’s share of imported textiles, particularly those from China, had been increasing sharply. In 2011, it had already reached 50 percent.
“The textile and garment sector has been an important pillar and labor-intensive industry for many years, absorbing labor, improving people’s living conditions and making a positive contribution to the island’s economy after the tourism sector,” added Mahendra.
Bali’s textile industry has been dealing with a double blow. “Under the CAFTA agreement, China’s products hit Bali in both the international and domestic markets.” Bali used to export its textiles and garments to the United States, European countries, Australia and Japan.
“Dozens of textile and garment manufacturers in Bali already went bankrupt or became tukang jahit, home-based tailors. We are now re-entering the 1970s era, working with outdated machines,” he added.
Dolly Suthajaya Nasution, owner of Sri Djaya Bali garment, said that in the last few years, the local textile and garment industry had been a single fighter facing the Dragon’s threat.
“We are confronted with gigantic challenges and the government seems to not support the industry,” said Dolly, whose products are shipped to Australia, Europe and the United States.
He went further, saying that it was difficult for the textile and apparel industry to get bank loans for the improvement of their machinery and to boost production.
“The textile and garment industry is considered a ‘sunset industry’ by banks and financial institutions. Therefore, they apply a very high interest rate,” he added.
Local banks charge an average interest rate of around 14 percent on loans to manufacturers, including in the garment and textile industry, compared to about 6 percent in China.
“The lowering of interest rates for manufacturers would have a snowball effect on the growth of industries, such as textiles, compared to other methods,” he added.
Pricewise, the island’s industry is also finding it difficult to compete with China’s products.
The rising cost of electricity, combined with high interest rates are significant factors that mean that competing against tariff-free imported garments has ruined the local textile and garment industry.
Local businessman Panudhiana Khun, who is also chairman of the Bali chapter of the Indonesian Employers Association (Apindo), said that his garment exports had been declining since 2010. “Our fashions are high-quality products, but we have to face cheaper quality products made by China and other countries in the region.”
Mahendra again confirmed that the potential threat to the industry came not only from China. “Bangladesh, Pakistan, Cambodia and Vietnam are our closest competitors. Balinese producers should not just sit and do nothing. We have to be brave to enter edgy competition with or without the government’s help.”
by Rita A.Widiadana on 2012-07-02
We are now enjoying the holiday season and you may feel the need for a total fashion makeover to brighten your old wardrobe, replacing your clothes with fabulous, bright, flowing floral prints and summery dresses.
Welcome to lines of local fashion stores and “boutiques” scattered all over Denpasar’s major streets, offering copies of Donna Karan’s spring and summer collections, from cool and comfy skinny jeans to chic creamy and mint-green lace blouses. There are also Zara-like animal-print skirts and T-shirts on display.
All of the collections shown on the world’s runaways this summer season are now available in these local fashion outlets at affordable prices, usually less than Rp 200,000 (US$21.4) per piece. They are almost all “Made in China”.
A.A. N. Mahendra, chairman of the Bali chapter of the Indonesian Textile Association (API), expressed his concern over the flood of Chinese fashion products into the Balinese market.
“The island’s textile and garment industry is facing huge challenges, but we don’t have any weapons to plunge into this ‘trade war’. It is like a ‘Jack-and-the-Giant’ scenario,” Mahendra said to Bali Daily in his office recently.
Mahendra, who is also CEO of Khrisna Group, explained that the enforcement of the China-ASEAN Free Trade Agreement (CAFTA) in January 2010 hit the fiber, textile and garment producers hard in Bali and elsewhere in Indonesia.
API’s data revealed the domestic market’s share of imported textiles, particularly those from China, had been increasing sharply. In 2011, it had already reached 50 percent.
“The textile and garment sector has been an important pillar and labor-intensive industry for many years, absorbing labor, improving people’s living conditions and making a positive contribution to the island’s economy after the tourism sector,” added Mahendra.
Bali’s textile industry has been dealing with a double blow. “Under the CAFTA agreement, China’s products hit Bali in both the international and domestic markets.” Bali used to export its textiles and garments to the United States, European countries, Australia and Japan.
“Dozens of textile and garment manufacturers in Bali already went bankrupt or became tukang jahit, home-based tailors. We are now re-entering the 1970s era, working with outdated machines,” he added.
Dolly Suthajaya Nasution, owner of Sri Djaya Bali garment, said that in the last few years, the local textile and garment industry had been a single fighter facing the Dragon’s threat.
“We are confronted with gigantic challenges and the government seems to not support the industry,” said Dolly, whose products are shipped to Australia, Europe and the United States.
He went further, saying that it was difficult for the textile and apparel industry to get bank loans for the improvement of their machinery and to boost production.
“The textile and garment industry is considered a ‘sunset industry’ by banks and financial institutions. Therefore, they apply a very high interest rate,” he added.
Local banks charge an average interest rate of around 14 percent on loans to manufacturers, including in the garment and textile industry, compared to about 6 percent in China.
“The lowering of interest rates for manufacturers would have a snowball effect on the growth of industries, such as textiles, compared to other methods,” he added.
Pricewise, the island’s industry is also finding it difficult to compete with China’s products.
The rising cost of electricity, combined with high interest rates are significant factors that mean that competing against tariff-free imported garments has ruined the local textile and garment industry.
Local businessman Panudhiana Khun, who is also chairman of the Bali chapter of the Indonesian Employers Association (Apindo), said that his garment exports had been declining since 2010. “Our fashions are high-quality products, but we have to face cheaper quality products made by China and other countries in the region.”
Mahendra again confirmed that the potential threat to the industry came not only from China. “Bangladesh, Pakistan, Cambodia and Vietnam are our closest competitors. Balinese producers should not just sit and do nothing. We have to be brave to enter edgy competition with or without the government’s help.”
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