Indonesia plans to allocate Rp 100bn to revitalize old machines includes textiles

Indonesian Industry Ministry Saleh Husin has put the revitalization program on top incentive strategies for achieving the industry wide growth target of 300 percent by 2019 for which the Ministry plans to allocate Rp 100 billion (US$7.9 million) from its 2015 budget to finance an annual program to revitalize old machinery in the textiles, leather-working and footwear industries in an effort to develop these fields and stimulate more investments.

This program has lasted seven years and it’s proven very effective in increasing productivity. That’s why they have decided to continue it, said Saleh on the sidelines of the program’s launch event in Jakarta the other day.

Saleh said that he would make sure that the proposed sum would be utilized to the fullest extent, despite being lower than last year’s Rp 106.5 billion in allocated program funds.

According to ministry data, the program has rejuvenated 1.88 million machines since its commencement in 2007, with another 3.66 million machines more than 20 years old awaiting upgrades.

There are currently six categories of machine eligible for rejuvenation, including textile looms, knitting machines and those used in footwear manufacturing and the mass-production of garments.

The ministry’s director general for industrial manufacturing, Harjanto, said that the state had disbursed Rp 1.18 trillion to fund the project between 2007 and 2014, attracting Rp 14.84 trillion in realized investments for machinery revitalization.

This year, the government was aiming to attract at least Rp 1 trillion from the textiles, leather-works and footwear community.
They hope that these industries will be able to attract more investors to achieve the Rp 270 trillion non-oil and gas investments target, especially in the upstream sector, said Ministry official.

Ramon Bagun, the ministry’s director for textiles and miscellaneous industries, said that the ministry would provide a 10 percent cut on the price of the machines, with a maximum disbursement of Rp 3 billion per case.

After collecting company proposals, they’ll have a technical meeting to determine which requests are accepted, before the funds are disbursed through the State Treasury Agency.

Ade Sudrajat, the chairman of the Indonesian Textile Association (API), appreciating the government’s ongoing commitment to the program, hopes that it would also look toward leveraging the industries’ exports.

The companies can start registering for the program from next Monday until June 30. Last year, only 122 of the 188 proposals were accepted for the program due to lack of funds.