China keen on investing in Indonesian textile industry

Maoxin Ye, the Vice President of China Hi-tech Group Corporations, is excited regarding the setting up of a machine spare parts producing unit for textile industry in Indonesia. He said that, the company does not have any problem in transferring technology to the new plant, and is also capable of financing the project.

Unlike China which has 100 million mills, Indonesia just has eight mills. Therefore, China is interested in playing a significant part in Indonesia’s textile machine restructuring program.

Though, Maoxin did not disclose the quantum of investment, he was optimistic that the government will help the company with its plan, like by offering tax concessions and import duty subsidies. He further said that, the company expects the government to treat it like an Indonesian firm.

If China makes investment in machine assembling, textile machine production will no more be meant to fulfil the domestic demand, as the machines then would be exported to even other developing nations including India and Pakistan, which also position themselves as major producers of textiles.

The shift towards Chinese products is mainly attributable to good quality of machines which enables the producers to boost their production to the level like that of the producers in Europe and Japan. Besides, energy saving capacity of Chinese machines is also high. Thus, Indonesian government has called upon the Chinese investors to invest in the country, and thereby to help it with its plan of restructuring the industry.

Of the eight million textile machines that Indonesia houses, two million are China-made, whereas remaining six million are more than 20 years old.

Chinese businessmen showed their interest in this program after the meetings that the government held in Beijing in October, and are believed to invest in various areas like production of textile, spinning and weaving machines as well as all other types of industrial machines.

The Indonesian government presently provides 10 percent subsidy on imports of textile machines meant for the restructuring program. This percentage would be further raised to 15 percent if the producers of these machines agree to set up their units in Indonesia.

Source: Fibre2fashion