Posted on 11 Oct 2011
Turkish and Indonesian industry ministers agree to enhance bilateral cooperation in the technology and industrial sectors to achieve a total trade of US$5 billion over the next five years.
Industry Minister M.S. Hidayat, who recently met Turkish Industry and Technology Minister Nihat Ergun in Istanbul, said on Sunday that Indonesia expected to further accelerate the development of its industrial sector through better cooperation with Turkey, whose industry saw significant growth.
“The industrial cooperation is expected to boost trade between Indonesia and Turkey. The Turkish industrial sector is quite strong and we can make the best use of its excellence to encourage the development of our industry,” he said in a statement.
Hidayat talked to his counterpart in a bilateral meeting to discuss possible cooperation on automotive, textile machinery, electronic and military equipment sectors, on the sidelines of the second industry ministers meeting of the D-8 developing countries group hosted by Turkey.
Hidayat said that Turkey was looking forward to expanding its ties with Indonesia in various sectors including the automotive and machinery sectors.
Turkey, currently one of the automotive production bases in Europe with an annual production of over than 1.2 million automobiles, eyed cooperating with Indonesia to develop automobile components and engines, he said.
“Right now, Turkey is developing its national automotive brands, and we can learn much from them,” Hidayat said.
He explained that Turkish investors had also expressed interest in investing in the textile machinery industry in Indonesia.
“It’s better for us to cooperate with Turkey to produce textile machines at home rather than import them. The government can offer tax holidays for these investments,” he said, adding that discussion about the planned investments was slated to conclude at the end of this month.
Earlier this year, the Industry Ministry launched a program to revitalize the country’s textile, footwear and leather industries and provided a total of Rp 177 billion (US$19.82 million). As part of the program, it aims to revamp 3,000 textile machines that are over 25 years old.
According to ministry data, textile companies nationwide are utilizing around 4 million spinning machines, 200,000 weaving machines and 34,000 knitting machines, which are all more than 20 years old.
Hidayat said that apart from the talks on the industrial cooperation he also urged Turkish authorities to address dumping allegations made by its domestic manufacturers against 19 Indonesian products such as synthetic textiles, cotton textiles, polyester fibers, tires and air conditioners.
Indonesia has yet to impose anti-dumping duties on flour, one of Turkey’s prominent exports to Indonesia, as demanded by local flour producers.
Bilateral trade between Indonesia and Turkey, home to more than 70 million people, has grown at a fast pace in recent years. In 2006, trade reached $1.38 billion and peaked to $2.09 billion in 2008. The figure slid to $1.27 billion in 2009 amid the global economic slowdown and rose by 8.66 percent to $1.38 billion in 2010.
Indonesia exports a wide range of products such as palm oil, rubber, cacao, textiles, paper and pulp, windshields, tires and furniture, and imports wheat flour, tobacco, cotton, iron and steel products and machinery.
