The more than 40 percent rise in provincial minimum wage (UMP) this year has forced around 60 textile and clothing firms from Jakarta to shift to Central Java region, Ade Sudrajat, chairman of the Indonesian Textile Association (API) has said.
Following the rise in UMP, labor-intensive textile and apparel enterprises in Greater Jakarta region were left with option to either relocate or terminate their business activity, Mr. Sudrajat said, Indonesian newspaper Kompas reported.
About 60 textile and garment enterprises from Jakarta, Bogor, Depok, Tangerang, and Bekasi (Jabodetabek) have shifted their factories to Central Java following the implementation of UMP 2013, while around 60,000 people have been laid off by companies, he added.
For relocation, some companies are also choosing Majalengka and Subang in West Java, as these provinces have lower wages than Jabodetabek, Mr. Sudrajat said.
Indonesia is currently the twelfth largest global textile and garment exporter, with around 38 percent of its exports destined to the US.
Source:
http://www.fibre2fashion.com/news/Association-news/indonesian-textile-association/newsdetails.aspx?news_id=151875
