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wo property developers, publicly listed PT Jababeka and Singapore-based Sembcorp Development Indonesia Ltd., are looking to set up an industrial textile complex inside the Kendal Industrial Complex (KIK) in Central Java to invigorate the local domestic textile industry.

Jababeka chairman SD Darmono said that the concept of the complex would mirror the complex in Jababeka, Bekasi, West Java, but would be used solely for textiles.

'€œThe industrial complex in Bekasi has been proven to drive competitiveness,'€ Darmono said at a discussion in Central Jakarta on Monday.

The KIK project, which is currently being built on a 2,700-hectare plot of land, does not have a target date for completion. Darmono said that his firm had acquired 630 hectares of land worth Rp 400 billion (US$29.5 million) for the textile cluster, and that the size would be increased according to the number of tenants.

'€œThat size [630 hectares] is enough for now,'€ he told The Jakarta Post on the sidelines of the discussion.

The KIK project is 51 percent owned by Jababeka, with the remaining 49 percent owned by Sembcorp. The two companies have not published a total investment value of the project because they are currently still at the stage of land acquisition.

The local textiles industry is, according to Darmono, currently facing challenges including increasing labor costs, limited raw materials and high lending rates. The industry would benefit, he added, from a skilled workforce.

'€œAs such, we want to build a training and research center in the complex,'€ he said.

The complex will also include hospitals, sport centers and housing for workers.

Jababeka would collaborate with the government, Darmono said, to develop housing for workers to lease. '€œWe are happy for the government, in this case any of the state-owned enterprises, to develop the housing,'€ he added.

The Industry Ministry'€™s director general for the textile and chemical industry, Harjanto, said that the government had always been supportive of the development of labor intensive industries like the textile industry.

The government was currently working to help such industries by providing training for workers and conducting promotion overseas, Harjanto added.

Indonesia'€™s main export destinations for textile and textile products are the US, Japan, Turkey, Germany and South Korea, according to the latest data available. But the country'€™s share in textile trading with major partners, excluding Japan, declined from 2007 to 2013, as neighboring countries such as Vietnam and Cambodia gained traction.

As well as external factors, domestic challenges are on the rise for the textile industry, including the new automatic electricity-price adjustments and a weaker rupiah, with resultant higher costs placing a financial burden on the industry.

The Indonesian Textile Association (API) has reported that at least 18 firms in Java have ceased operations, laying off around 30,000 workers. The situation could worsen and the industry may further lay off up to 50,000 workers by August or September, according to the API. (saf)