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uhaya Wondo, 43, sat among piles of knitted sweaters that he sells for a living. As one of the knitters at the Binong Jati Knitting Center, Bandung, West Java, he said he had scaled down his knitwear production since 2012.

“Back then, I used to have 20 sewing machines. Now I only have six left. I also changed my mindset, from only working as a knitter to working as a trader,” Wondo told The Jakarta Post at his shop in Binong Jati recently.

It was a tough call, but his strategy has borne fruit and made him one of only 200 remaining knitters in the area.

The knitting business in Binong Jati started in 1965. At that time, the knitters were all locals and only sold their products at the Pasar Baru market in Bandung.

In 1997, people from outside Bandung started to flock to the area and begin similar business. It was Binong Jati’s heyday and the products penetrated markets outside Bandung.

There used to be more than 400 knitters. The number started falling in 2012 as the economy decelerated and costs soared.

In an attempt to cut costs, Wondo partners with 10 knitters — who also own sewing machines — to produce knitted poncho.

He buys the yarn and hands it to the knitters, who make the products. Wondo purchased several pieces of computer-designed knitwear from other shops as well to make the production process more efficient.

The finished products are now waiting for buyers. Each piece of knitwear carries a price tag of Rp 60,000 (US$4.5) to Rp 75,000.

At present, around 60 percent of the knitters send their clothing to the Metro market in Tanah Abang, Jakarta. Another 30 percent provide goods — such as sweaters, vests and cardigans — to markets in Sumatra, East Java and Central Java.

“The remaining 10 percent sell the products in Bandung,” Wondo said, adding that products from Binong Jati remained competitive in terms of quality amid the glut of imported products from China.

However, he claimed that high production costs and high interest rates had become obstacles for local knitters to compete with their Chinese counterparts.

“The Chinese get loans from banks so that they can invest in machines to produce more complex designs. They get low interest rates at around 4 percent, while we get 6 percent here.”

Renan Hermanto, owner of Bandung-based T-shirt brand Animous, voiced similar concerns. He only sells his products on consignment at local distribution outlets and online through Instagram and Facebook to slash costs.

Renan used to rent a shop at the Tanah Abang market. “The rent could be Rp 150 million per year for a 2.5 meter-by-2.5 m space. Not to mention I had to provide stocks that could cost me another Rp 100 million. How could I obtain money for that?”

In addition to working on consignment, Renan also limits Animous’ output. He only produces 50 items per design. If the market response is good, he will produce extra items.

The capital issues are not surprising to the local administration.

Last year, the Bandung administration launched a financing program called Kredit Melati with state lender Bank Rakyat Indonesia (BRI) aimed at catering to the city’s small and medium enterprises (SMEs).

Rp 18 billion of loans were issued, and Bandung Mayor Ridwan Kamil said 7,000 SMEs had obtained the Kredit Melati loans. The administration is looking to increase the loans to Rp 100 billion this year.

To help entrepreneurs register their businesses, the administration introduced a mobile application dubbed “Gampil”, the Sundanese word for “easy”. (adt)