Business in Yogyakarta starts to recover from 2006 earthquake

Small and medium enterprises in Yogyakarta, the mainstays of the province's economy, have started to show signs of recovery after last year's earthquake.

The recovery of SMEs in Bantul regency, the area worst affected, had now reached 60 percent.

Bantul regency received donations amounting to around Rp 4 billion (US$45,770) to assist with SME recovery from the State Ministry for Cooperatives and SMEs last year, Rp 4 billion from the Trade Ministry and Rp 7 billion ($801,098) from the Industry Ministry.

"Our target is to achieve full recovery in 2008," said Yahya, head of the Bantul trade agency, during the opening Tuesday of a two-day product exhibition and business forum at Le Meridien Hotel in Jakarta. The event is intended to promote the products of Yogyakarta industry.

"After the earthquake, many SMEs had to stop production because their infrastructure and equipment was destroyed" said the assistant to the deputy director for domestic trade at the State Ministry for Cooperatives and SMEs, Halomoan Tamba.

The exhibition and forum are expected to help reestablish the marketing networks disrupted by the earthquake, organizing committee chairperson Eritria D. Soedomo told The Jakarta Post.

Besides helping reestablish networks, the event would also promote new products from the province, she explained.

"Most of our products are exported to Europe. But now I want to start improving domestic sales. I hope this exhibition will familiarize people with our unique products," said Tris Nugraheni, an exhibitor who produces furniture from mango wood.

Yahya said limited marketing and distribution opportunities were just some of the many problems faced by SMEs, besides a lack of capital, technology and management skills.

He said that in order to improve domestic distribution networks, SMEs and cooperatives had established a franchise business called Smescomart (small and medium enterprise and cooperative market), with 48 outlets in Java.

"SME products have few opportunities to get on the shelves of retailers such as Alfa. So we are encouraging the establishment of stores that use the same marketing systems as are employed by established retailers to help sell their products." said Halomoan. He added that people had responded enthusiastically to the Smescomart outlets, and more would be opened in Bali soon. (JP/12)
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