Textiles producers are being encouraged to modernise their equipment with the offer of subsidies on loan repayments.
The head of the West Java Industry & Trade department, Agus Gustiar, said in Bandung on the 24th that those companies which upgrade their equipment would receive a 15% subsidy on the interest rates levied on their loans, from 2007.
In the interests of keeping the Indonesian textiles industry competitive Agus said it was time to modernise equipment with, he said, most machines used in textiles factories being over 20 years old. He said:
Global conditions demand international quality. The government is going to subsidise interest rates. The textile industry itself has to become more efficient.
Exports from West Java province are dominated by textiles. From January to March 2005 the volume was at 46,642 tons with a value of $236 million. In the same period of 2006 this rose to 66,239 tons at $275 million in value.
The decision to subside loans was taken after input was received from textiles industry leaders, people who complained of the high costs of borrowing presently.