Central Java Industries Threatened to be Out of Business
17 March 2015 07:02 WIB
TEMPO.CO, Semarang - Thousands of industries in Central Java are threatened to go out of business following the increase of dollar against rupiah. Rupiah has reached USD13,245 per US dollar, making majority of industries unable to afford raw materials from abroad in the long term.
“If it continues to stay this way, it will experience in a collapse in the next three to four month,” Chairman of the Indonesian Employers Association Central Java, Frans Kongi, said in Semarang on Monday, March 16.
Frans mentioned that nearly one thousand industries in central Java are using imported raw material purchases that are greatly affected by the exchange rate. The industries require more imported raw materials compared to the local contents, which is around 60 to 70 percent. “It affectsthe increase cost due to higher raw material prices,” Frans said.
According to Frans, the industry still rely on raw materials from abroad including textile, glass, steel, and various foods and beverages.
Entrepreneurs expect the government to intervene with the issue that industries are facing, one of them is by stabilizing the quality of domestic raw materials. “There are abundance of domestic resources, but the processing system will require more cost,” he said.
EDI FAISOL (SEMARANG)