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Coconut processing firms axe 3,500 workers amid raw material dearth
The government has agreed to impose a levy on coconut exports and derivatives, but has yet to decide whether to impose an export moratorium as proposed by the industry.
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Production under pressure: A Palembang customs officer (left) shows a coconut that has been sent back from Thailand due to an unexpected sprout growth on Nov. 19, 2019, in Palembang, South Sumatra. (JP/Yulia Savitri)
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wo coconut processing companies based in Riau have laid off a total of 3,500 workers as they struggle to maintain production in the face of a shortage of the fruit as a key raw material.
The news was brought to the surface by an Instagram post that mentioned PT Pulau Sambu or Sambu Group who laid off 1,700 workers on top of PT Riau Sakti United Plantations who axed 1,800 workers who had been working for under 5 years.
Confederation of Indonesian Trade Unions (KSPI) chair Said Iqbal said on Sunday that the news was true and stated that the layoffs were due to a coconut shortage that pressured the companies’ production.
“[The layoffs] are true. We have checked it. It was because of a shortage in raw materials. I have checked it with KSPI Riau,” Said was quoted as saying by Bisnis.com.
The shortfall of coconuts was caused by extreme weather changes and pests, as well as an export policy that was said to disrupt domestic supply.
Read also: Manufacturing, agricultural exports up strongly as coal shipments slump
Statistics Indonesia (BPS) noted that the archipelago exported 71,077 tonnes of endocarp coconuts in this year’s first two months, valued at US$30.8 million.
