Flood-stricken exporters want government help to avoid buyers' penalties

The Jakarta Post, Jakarta

Export companies affected by the recent floods in Jakarta have asked the government for its help in shunning penalties foreign buyers are attempting to impose over export delays.

They have also asked for support in convincing buyers not to shift their orders to other countries.

As the delays in deliveries were due to circumstances beyond their control, they should be exempt from paying penalties or other compensation, the companies said.

The floods that hit Jakarta last week disrupted business in the city that accounts for about one-third of Indonesia's gross domestic product, the biggest in Southeast Asia.

Many factories were closed due to the floods, which began last Friday. Access to Tanjung Priok Port, the main overseas shipping terminal, was also cut.

The economic cost of Jakarta's worst floods in five years may reach Rp 4.1 trillion (US$453 million) National Planning Minister Paskah Suzetta has said.

The 179-hectare Cakung Industrial Bonded Zone in North Jakarta was severely affected by the floods, with more than a hundred factories in the zone forced to put production on hold.

PT Caterindo Garment Industri director Bartolomeus Saleh, whose company operates in the bonded zone, said late last week that most exporters were in difficulty because their foreign partners had begun to impose penalties because of the delays in shipments.

He said that many were also concerned that they might lose business as buyers had begun to threaten to switch to other countries.

"We tried to assure them that we would meet all the demands required by our contracts, but they still threatened to look for other producers."

Of the 125 factories in the Cakung bonded zone, more than 80 percent are engaged in textile and garment production, exporting mainly to the United States and Europe.

PT Kaho Citra Indah Garmen director Parmudyo said the affected businesses had demanded decisive action from the government, such as the issuance of a formal notice to importers about the situation.

"The government must convince importers so that they won't go to another country for supplies. Apart from that, the government also has to ease the burden exporters carry and simplify the procedures for exporting goods," he said.

Eddy Sulaimen, the director of PT Aneka Garmentama Indah, said that without electricity, no document administration or data transfers could be carried out and that he hoped the customs and excise officials would come up with a solution.

Indonesian Bonded Zones president director Agus Supriyanto said that efforts were underway to restore electricity and water to the zone.

"We have deployed help like heavy equipment, trucks and mechanics for the factories in Cakung. We are also trying to come up with a solution for the aftermath of the flood," he said.

Automotive product exporters have also been affected by the floods. PT Toyota Motor Manufacturing Indonesia (TMMI) said that the a shipment of 820 cars had been delayed due to the floods.

"Usually we export twice a week, every Tuesday and Thursday," TMMI planning director Irwan Priyantoko told Antara on Friday.
Jawawa.net: Indonesian Business and Investment News Aggregator